Mon Jun 15, 2015/Reuters

The Kenyan shilling was little changed on Monday and traders said they expected it to get a boost from foreign investor dollar flows into Treasury bonds due to be auctioned later this month.

At 0654 GMT, commercial banks quoted the shilling at 97.25/35 to the dollar, compared with Friday’s close of 97.20/30.

Traders said the shilling is expected to be boosted by dollar inflows into two- and five-year Treasury bonds worth a combined 20 billion shillings due to be auctioned on June 24.

Foreign investors are attracted to the bonds by their relatively higher interest rates.

“We possibly see (foreign investor inflows), especially on the new bond coming up. But we still see demand and supply being the key drivers,” said a senior trader at one commercial bank.

“Although the actions of the MPC, the tightening last week, would curtail further weakness.”

Last week the central bank raised its benchmark lending rate to 10 percent from 8.50 percent, saying it needed to support the shilling and curb inflationary pressures.

Traders said they forecast the shilling to trade in the 96.50 to 98.00 range in the next few days.