NAIROBI: The Kenyan shilling lost ground against the dollar on Monday, hurt by a weak supply of the US currency.
At 0720 GMT, commercial banks posted the shilling at 88.45/55 per dollar, compared to Friday's close of 88.25/35.
Dollar inflows have shrunk in recent months - partly as a result of falling business in the country's key tourism industry, hurt by a string of attacks by Islamist militants.
Commercial Bank of Africa trader John Njenga said traditional dollar inflows from the tea sector and non-governmental organisations (NGOs) had also been weak, while demand for the US currency remained strong.
"Demand from manufacturing and the oil sector is bigger than the supply, so that's pushing it (the shilling) higher (weaker)," he said.
Traders say the shilling's losses are likely to be limited by a shortage of supply of the local currency, caused by delays in the government disbursing funds to local authorities and government departments.
The weighted average interest rate on the overnight borrowing market for banks rose to 13.4508 percent on Friday from 13.1097 percent on Thursday. In mid-July it was about 7.5 percent.
Comments
Comments are closed.