NAIROBI: The Kenyan shilling weakened against the dollar on Tuesday due to demand from manufacturers, and traders expect it to ease further in the days ahead.
At 0730 GMT commercial banks quoted the shilling at 87.00/87.10 to the dollar, from Thursday's close of 86.85/95.
The shilling was weakening, with importers in manufacturing and energy buying dollars towards the end of the month.
"The shilling is on a weaker note. We are seeing some pressure build up. We are going to see end of month demand coming in," Andlip Nazir, senior trader at I&M bank, said.
"(As for) inflows, I see them not being that much. We expect the dollar to gain against the shilling in the days ahead.
There will be pressure."
Sheikh Mehran, a senior trader at Kenya Commercial Bank, said the shilling had also eased due to interbank dollar demand.
Traders said the shilling could get some relief if the central bank came to the market to mop up shilling liquidity.
By removing excess liquidity from the market, the central bank makes it more expensive to hold onto long dollar positions, which in turn helps strengthen the shilling.
"We will also have to watch out for what the central bank is doing. If they will be in the market to mop up, then that will give the shilling a boost," Nazir said.
Traders said they expect the shilling, which has lost 0.46 percent against the dollar since the year begun, to trade in the 86.80-87.15 range in coming days.
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