NAIROBI: Kenya's shilling weakened to a new 3-1/2-year low against the dollar on Monday, hurt by demand for the US currency from energy and manufacturing sectors.
At 0635 GMT, commercial banks quoted the shilling at 102.50/70 to the dollar, compared with Friday's close of 101.85/95. Down about 14 percent against the dollar this year, the shilling is trading at a level last seen in October 2011.
A trader at one Nairobi-based commercial bank said several orders which came through late on Friday were processed on Monday morning, putting pressure on the currency.
"We had demand from the energy sector and also saw some manufacturing companies look for orders to buy dollars," said the trader.
Traders say the shilling was expected to remain under pressure in coming days, hurt by a wide current account deficit and scarce tourism receipts due to dwindling visitor numbers following a spate of attacks by Somali Islamists.
The possibility that the central bank will once again intervene to prop up the local currency by selling dollars was offering support to the shilling, added the Nairobi-based trader.
"We expect the central bank to do something," he said.
Comments
Comments are closed.