Kenya's shilling slid against the dollar on Friday and traders said they expected a deeper fall on demand for the US currency for grain imports. The commercial banks posted the local unit at 67.25/35 against the greenback compared with Thursday's close of 66.70/80.
Dealers said they expected it to trade at around 67.50 versus the US currency. "The market has changed and there is generally a bias towards a weaker shilling right now," said Duncan Kimani, a trader at Bank of Africa. "Information is filtering into the market that there will be a bit of demand coming up in the near term."
The local unit traded at around 67.00 earlier in the session. Kimani said there was talk in the market that the country might buy more grain in the near future. The government is already importing 3-million bags of maize to cover shortfalls triggered by a violent post-election crisis in January.
"The deals are about to be done and comparing that to our inflows, that will be quite a bit of money going out," said Kimani. Jeremiah Kendagor, head of trading at Kenya Commercial Bank, said banks were covering short dollar positions ahead of the weekend. "The target right now is 67.50. The shilling might weaken slightly," he said.
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