NAIROBI: The Kenyan shilling weakened slightly within three-year lows on Tuesday, while the benchmark share index was steady.
At the close of trade, leading commercial banks quoted the shilling at 94.35/45 to the dollar, slightly down from Monday's closing rate of 94.25/35.
Demand for dollars from firms seeking to meet their end month obligations had undermined the shilling, traders said.
Kenya's central bank on Monday sold an unspecified amount of dollars to banks - the third time the bank has intervened by selling dollars in April.
Traders said the shilling - which is down 4.2 percent against the dollar so far this year - is likely to remain under pressure in the coming weeks, even if the central bank intervenes again to cushion local currency weakness.
"It looks like one-way traffic," Chris Muiga, a senior trader at National Bank of Kenya, said of the weakening currency, adding that the shilling could fall to 95 to the dollar and possibly even to the 97 and 98 levels by mid-year.
The shilling has been hit by a slowdown in foreign exchange revenues from tourism after a number of militant attacks that scared visitors away and by a decline in horticulture earnings blamed on uneven rain.
A rise in a capital spending, mostly for infrastructure projects, has also put pressure on the currency, Muiga said.
In the stock market, the benchmark NSE-20 share index fell by a fraction, shedding 1.27 points or 0.03 percent to finish at 5,055.00 points.
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