NAIROBI: The Kenyan shilling eased slightly on Friday, trading in a tight range but with pressure from importers seeking dollars for end-month payments starting to build, traders said.
At 0757 GMT, commercial banks quoted the shilling at 86.50/60, compare to Thursday's close of 86.45/60. The shilling has gained 0.1 percent against the dollar this year. Traders expected it to stay in a 86.30 to 87.00 range in coming days.
"Mostly I would say what was keeping the shilling supported was tight liquidity due to tax payments," Nahashon Mungai, trader at Kenya Commercial Bank, said. Tax payments mean higher demand for shillings.
"About 12.45 billion shillings of repos mature today, with another 8.4 billion shilling maturity for Monday. So this could ease the liquidity situation somewhat and obviously this will then make the shilling slightly weaker."
Increased shilling liquidity in the money markets makes it relatively cheaper to hold on to long dollar positions.
Traders said the shilling was also expected to come under pressure from importer demand for dollars in the days ahead.
"There is some demand. I think it's just (from) importers in general. Into next week, I expect a bit of more end-month demand. It might slide a bit," Julius Kiriinya, trader at African Banking Corporation, said.
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