Kenyan shilling weakens on energy dollar demand

NAIROBI, March 26 (Reuters) - The Kenyan shilling 
fell on Monday due to end-month demand for dollars from
importers, mainly in the energy sector, but traders expected
inflows of the U.S. currency from a tea auction to provide
support later in the week. 
    Traders said payment for a one-year Treasury bond and
tranche of Treasury bills auctioned last week are due on Monday,
but have already been factored in. 
    At 0720 GMT, commercial banks quoted the shilling 0.2
percent weaker to the greenback at 83.10/30 per dollar, compared
with Friday's close of 82.95/83.05. 
    "End-month demand, particularly from the energy guys, may be
in the market," said Bhavin Chandaria, a trader at Imperial Bank 
    "But I don't see it weakening beyond 83.50 this week."  
    The shilling firmed against the dollar on Friday after banks
trimmed bets on further gains for the U.S. currency, compounded
by inflows from offshore investors.  
    The shilling oscillated within the 82.80-83.50 range last
week. It has risen 2.5 percent against the dollar this year,
after plunging 25 percent to a historic low of 107 shillings per
dollar in October.    
    High-yielding government securities have been a key support
for the local currency, drawing good appetite from offshore
investors. However, recent interest has been more on
longer-dated paper given concerns that inflation might not ease
as fast as expected.  
    "Offshore investors have already made provisions to fund the
bond and bills today," Ignatius Chicha, head of markets at
Citibank, said. 
    This week, the central bank will be selling the 91-day and
182-day Treasury bill.   
    John Muli, a trader at African Banking Corporation said tea
inflows later in the week were also expected to lend support to
the currency. 
    Kenya, the world's biggest exporter of black tea, usually
holds a weekly tea auction every Tuesday. 
    "Tea inflows might support the currency later in the week," 
Muli said. 
               ...........................Shilling spot rates
                  .....................Shilling forward rates
                           .......................Cross rates
         ..................................Local contributors
           .......................Central Bank of Kenya Index
          .....................Kenyan Bonds contributor pages
                          ...............Treasury bill yields
        ..................Central bank open market operations
        .........................Horizontal repo transactions
         ,       ................Daily interbank lending rate
              .............................Kenya Bond pricing
             ..................Real time Africa economic data
 <ECI & AFR> ...........................African economic news
          .................................NSE-20 Share Index
         .................................NSE All Share Index
             ...........................FT NSE Kenya 15 Index
             .......................... FT NSE Kenya 25 Index