NAIROBI: The Kenyan shilling weakened on Tuesday as importers bought dollars, with traders expecting the local currency to stay under pressure in coming days after the central bank held its key lending rate steady.
The shilling was posted at 86.80/87.00 per dollar at the close of the markets, 0.2 percent weaker than Monday's close of 86.60/80.
"With nothing having been done we expect status quo in the foreign exchange market. But the shilling will remain under pressure," said Peter Mutuku, head of trading at Bank of Africa.
The central bank held its key benchmark lending rate at 8.5 percent on Tuesday after markets closed, citing the need to let previous cuts filter through as well as emerging risks like instability in Egypt.
The shilling has lost 1.2 percent since July 3, in line with other emerging market currencies, weakening against the dollar after strong US jobs growth increased the chances of the Federal Reserve rolling back its stimulus in coming months.
The drop has been fuelled further by civil unrest in Egypt, the biggest buyer of Kenyan tea. The commodity is the top hard currency earner for the country and is sold every Monday and Tuesday at the port city of Mombasa.
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