NAIROBI (Reuters) - The Kenyan shilling was steady early on Wednesday and traders said the local currency could firm to 85.00 per dollar, helped by foreign investors streaming into the stock market after a peaceful presidential election.
At 0716 GMT, the shilling was posted at 85.30/50 per dollar, barely changed from Tuesday close of 85.25/45.
"Foreigners selling dollars to buy into the stocks market is one of the reasons the shilling has gained this week," said Chris Rwengo, head of trading at Standard Chartered Bank.
Kenya's main share index has surged 7 percent in two sessions after Uhuru Kenyatta was declared the winner in a close presidential race, avoiding a much anticipated run-off or a repeat of the violence that marked the previous poll.
Analysts said the peaceful outcome had given investors an added impetus to buy assets in East Africa's biggest economy, but a legal challenge to the result and the possible international trial of the winner could dampen enthusiasm.
On Tuesday, the Central Bank of Kenya held its main interest rate at 9.50 percent for the first time since July 2012 as it buys time to assess the state of the economy after the election.
The shilling has gained 1 percent since the poll results were announced, lifted by a return of business confidence and importers who had covered their dollar requirements in the run up to the election staying out.
The local currency is 1 percent stronger against the dollar in the year to date.
"The shilling can rally further against the dollar in the coming days driven by a lack of significant dollar demand," said Bank of Africa in a daily note.
Source: http://news.yahoo.com/kenyan-shilling-seen-firmer-stocks-rally-081240263--sector.html
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