The Kenyan shilling was steady against the dollar on Monday, with investors looking to Wednesday's interest rate meeting for direction, traders said, while stocks inched lower.
A Reuters poll showed a large majority of analysts forecast Kenya's central bank will keep its key interest rate on hold for the fourth month in a row, with the rate of inflation higher than expected last month and upside risks persisting.
But “no one wants to take a position before the Monetary Policy Committee (meeting),” said Sameer Lagadia, head of trading at Diamond Trust Bank.
At the 15:00 SA time market close, commercial banks quoted the shilling at 83.00/20 per dollar, barely changed from Friday's close of 83.10/30.
Traders expected trading volumes to be thin again on Tuesday.
While inflation fell to 15.6 percent in March, its lowest level since July 2011, from February's 16.7 percent, month-on-month data showed a 1.34 percent rise after a 0.04 percent fall in February.
“Month-on-month inflation was not positive. There is a likelihood they (the MPC) will hold the rate steady,” said Peter Mutuku, a trader at Bank of Africa.
The local currency is up 2.4 percent this year, supported by tight monetary policy. The shilling tumbled to a record low of 107 to the dollar in October before a series of aggressive rate rises helped it recover.
The MPC said after its March 12 meeting the country's balance of payments outlook remained a concern, with rising global oil prices a threat to the stability of the exchange rate and continued falls in inflation.
On the stock market, the main NSE 20-Share index edged down 0.1 percent to 3,363.72 points on Monday, dragged lower by mobile operator Safaricom which lost 3.1 percent to close at 3.15 shillings ($0.04) on foreign sales, analysts said.
“Foreign investors want to push the prices lower, pre-full year results,” said Robert Munuku a trader at Drummond Investment Bank.
Full year results for the leading mobile provider in the country are expected towards the end of this month, with data and its mobile money services, Mpesa, seen driving up its revenues.
In the fixed income market, government bonds worth 238 million shillings were traded, down from Friday's 2.06 billion shillings. - Reuters