NAIROBI: The Kenyan shilling firmed on Thursday, helped by subdued dollar demand but traders said the local currency was expected to weaken when importers resume buying the US currency.
At the close of trade, leading commercial banks quoted the shilling at 96.15/25 to the dollar, up from 96.40/50 at Wednesday's close.
However, traders said the shilling, which has lost 5.7 percent so far this year against the dollar, will resume weakening as importers return to the market to buy dollars to meet their regular end-month requirements.
"The demand side still looks heavy and market players still feel the shilling remains under pressure due to weak fundamentals," Bank of Africa said in a daily market report.
Traders have said the shilling would extend losses on concerns about the current account deficit, as a growing economy sucks in imports, as well as a slump in tourist revenues after a spate of Islamist militant attacks scared off visitors.
In the stock market, the main NSE-20 share index was barely changed, shedding 0.77 points or 0.01 percent to 4,979.71 points as investors took a pause from the previous day's sell-off triggered by foreign investors who booked gains on worries about the impact of the weakening shilling.
In the debt market, bonds worth 896 million shillings ($9 million) were traded, down from the previous day's volume of 2.5 billion shillings.
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