Kenya's shilling firmed against the dollar on Friday, but traders said pressure from increased shilling selling and gloom over the country's economic outlook could push it lower. The commercial banks posted the local unit at 79.75/85 compared with Thursday's closing price of 79.90/80.00.
"We have seen a lot of (dollar) buying in the last couple of days from offshore players," said Chris Muiga, a senior dealer at Kenya Commercial Bank. He said the market was concerned about factors like planned government borrowing, falling foreign exchange reserves and maize imports.
"They don't bode very well for the economic climate of the country," he said. "We will probably head lower. We are looking at 80.50 in the near term." Bank of Africa said the shilling could find support at that level: "We anticipate the shilling to remain bearish as sentiment still remains in favour of a weaker shilling. We however feel there might be a stall especially at the 80.50 level," the bank said in a market report.