NAIROBI: The Kenyan shilling weakened on Wednesday due to dollar demand from importers in the energy and telecommunications sectors, and traders said the local currency could lose even more ground.
At 0749 GMT, commercial banks quoted the shilling at 88.70/80 to the dollar from Tuesday's close of 88.60/70.
"There's continued (dollar) demand, especially from the energy, oil and telecoms sectors. So it's putting the unit under pressure for now," a senior trader at one commercial bank said.
"We feel that this (demand) will continue for the next month or so."
Traders said they were also on the lookout for any central bank action in the money markets.
On Tuesday, the bank absorbed 5 billion shillings ($55 million) from the money markets in excess liquidity, after taking out 5.93 billion shillings a day earlier.
The central bank has regularly mopped up excess liquidity from the money market since last year, partly lending support to the shilling by making it more expensive for banks to hold long dollar positions.
Traders said they forecast the shilling to trade in the 88.50-89.00 range in coming days.
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