NAIROBI: The Kenyan shilling weakened on Wednesday because of demand from oil companies for dollars, then steadied on expectations the central bank would intervene if it got much weaker.
At 0730 GMT, commercial banks quoted the shilling at 87.80/90 to the dollar, slightly down from Tuesday's close of 87.75/85.
"We saw the oil sector in the market buying dollars, so that's the marginal weakening on the shilling," John Njenga, trader at Commercial Bank of Africa, said.
Traders said the shilling's weakening was expected to be capped at 88 to the dollar, on anticipation the Central Bank of Kenya would intervene to stop the depreciation.
"For the 88 level is a very important level in this market. Because last time it hit 88 level we saw CBK come in to sell dollars. So market is trading cautiously," Njenga said.
Traders said they forecast the shilling, which has lost 1.4 percent against the dollar so far this year, to stay in the 87.60-88.00 level in coming days.
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