NAIROBI: The Kenyan shilling eased on Thursday as importers sought dollars and is likely to face more pressure in coming days because a downturn in tourism has hurt foreign exchange inflows.
At 0831 GMT, commercial banks quoted the shilling at 88.80/90 to the dollar, compared with Thursday's close of 88.75/85.
The Bank of Africa wrote in a report that it expects the shilling to consolidate at its present range, "with a bias for further weakness to test the 89.00 level probably a trigger point for central bank intervention."
In late August, the central bank sold dollars into the market, after the shilling hit 88.80/90, which at the time was its lowest level since December 2011.
Traders said dollar supply was low due largely to the hit to the tourism industry from frequent deadly attacks blamed on Islamists from neighbouring Somalia.
Hard currency inflows from the sale of tea at weekly auctions have also fallen this year as oversupply eroded prices. Kenya is the world's biggest exporter of black tea.
The local currency had also come under pressure from increased shilling liquidity in the money markets after the government resumed spending following weeks of delay.
"The government has been spending over the (past) couple of weeks. There was a huge bill pending and they paid. So liquidity is back," said Chris Muiga, senior trader at National Bank of Kenya.
Earlier on Thursday, the central bank said it planned to mop up 7 billion shillings in excess liquidity from the money markets, a move that partly supports the shilling by making it more costly to hold onto long dollar positions.
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