Thursday, 30 July 2015 12:38
NAIROBI: Kenya’s shilling weakened in early business on Thursday as companies sought dollars to meet end-of-month payments but traders said clients were cautious in case the central bank intervened to sell dollars again.
By 0654 GMT, the shilling was trading at 101.95/102.05, slipping from Wednesday’s close of 101.60/70.
The central bank sold dollars on Wednesday at around the 102.50 level. The sales provided brief support, although the shilling has remained under pressure due to global dollar strength and a slump in dollar revenues from tourism.
“The market is cautious,” said one senior trader, although he said the overall trend was still for a weaker shilling.
Another dealer noted regular demand from companies seeking dollars to meet end-of-month payments.
But he said rising overnight interbank rates on the shilling was providing some support to Kenya’s currency. Overnight rates had climbed to about 18 percent from below 10 percent at the start of the month, the dealer added.
“If a client needs dollars, you get the dollars and pass it on, as opposed to having long positions (on the dollar). It is very expensive at the moment,” he said.
