Kenya’s Central Bank said yesterday it planned to inject Sh16 billion using reverse repurchase agreements, saying liquidity was skewed in the money market.
Traders say the bank may be seeking to help smaller lenders, who have found it difficult to borrow from larger counterparts after it put Imperial Bank under receivership on October 13.
The shilling strengthened helped by foreign investors bringing in dollars to buy high-yielding government Treasury bills and bonds, and was expected to gain further in coming days, traders said.
At 10.49 a.m, commercial banks quoted the shilling at 101.45/55 to the dollar, compared with Tuesday’s close of 101.60/70.
“Right now, you have seen the government securities are giving good yields, so a lot of inflows have come in from foreign investors to pursue these yields,” a senior trader at one commercial bank said.