NAIROBI (Reuters) - The Kenyan shilling consolidated recent gains against the dollar on Friday, as market players adopted a wait-and-see approach ahead of presidential elections on March 4.
At 0707 GMT, commercial banks quoted the shilling at 86.00/20 per dollar, the same level it closed on Thursday.
"The sentiment on the election is positive and the possibility is that the shilling will strengthen further after a peaceful vote," said John Muli, a trader at African Banking Corporation.
The shilling has rallied as much as 2.4 percent in the last seven sessions to hit this year's traded high of 85.60 and reverse nearly all the losses it had made this year, Thomson Reuters Data showed.
The local currency came under pressure at the start of this year as importers stockpiled on dollars ahead of the first presidential election since the disputed 2007 vote resulted in widespread violence that crippled east Africa's largest economy for weeks.
However, worries about a return of the ethnic fighting that followed the last poll have eased as candidates and officials promised a peaceful vote this time round.
The central bank has also actively soaked up liquidity using repurchase agreements and occasionally sold dollars to support the shilling.
Traders said the shilling would trade in the 85.80-86.30 during the Friday session as banks reposition their dollar holdings after the local currency firmed nearly 2 percent in the last two sessions.
"We expect the shilling to hold steady today as most players square off dollar positions ahead of the March 4 General Election," said Bank of Africa in a daily note.