NAIROBI (Reuters) - The Kenyan shilling rallied on Thursday for a sixth session to trade at its strongest level so far this year, four days ahead of presidential and legislative elections.
At 0908 GMT, Thomson Reuters data showed the shilling firmed 0.8 percent during the session to strike an intraday high of 85.60 against the dollar, last reached on December 27, 2012.
"The shilling is strengthening on account of previously being heavily overbought. The demand side is not much as the market had anticipated ahead of Monday's vote," said Raphael Owino, assistant general Treasury manager at Commercial Bank of Africa.
Monday's presidential and legislative elections are the first since President Mwai Kabuki's re-election in 2007, a win that prompted opposition accusations of rigging and unleashed weeks of inter-tribal fighting that killed more than 1,200 people.
Front-runners Prime Minister Raila Odinga and former Finance Minister Uhuru Kenyatta are neck-and-neck in the polls. If no candidate wins an absolute majority, the vote will go to a decisive run-off in April.
Fear of unrest after these elections has seen some businesses slow down their operations.
The central bank has been intervening to support the shilling by mopping up excess liquidity from the money markets on an almost daily basis, while occasionally selling dollars to banks.
Market players said a smooth handover of power could boost the shilling further, though gains could be checked as importers resume full operations after the vote.
The shilling has now rallied 2.4 percent in the last six sessions, wiping all the losses it had made this year, as the market bets a closely contested presidential vote next Monday will not result in widespread violence.
The shilling has reversed its loses to post a 0.6 percent gain against the dollar so far this year.
"Someone big might have seen a floor and decided to sell his dollar holdings. That might have caught some guys flat-footed and they decided to sell too," said a senior trader at one commercial bank.
On the Nairobi Securities Exchange, shares in sugar grower and miller Mumias tumbled 19.2 percent to 4 shillings a share after it warned on Wednesday that its full-year profits will fall more than 25 percent.
Two banks, Equity Bank and Co-operative Bank, posted big profit jumps. Equity said its 36 percent profit rise was above its own expectations.
Shares in Equity were up 0.9 percent to 28.25 shillings per share, while Co-operative Bank gained 2.2 percent to 13.80 shillings each after the announcement.