NAIROBI: The Kenyan shilling was flat on Friday, with a key support level in traders' sights ahead of an expected pick-up next week in end-month demand for dollars.
At 0720 GMT, commercial banks posted the shilling at 87.40/50, unchanged from the previous day's close.
"The shilling will be under more pressure next week as we start the traditional end-of-the-month demand (for dollars)," said Robert Gatobu, a dealer at Bank of Africa.
The shilling might weaken past its 87.50 support level. "From next week we might try and break it. On the supply side there are minimal flows compared to the demand that is there," Gatobu said.
Tourist arrivals, a key source of hard currency, have been cut by frequent gun and grenade attacks after Kenya intervened in neighbouring Somalia.
Visitors left coastal resorts on Thursday after Britain and the United States issued warnings against travel to parts of Kenya due to threats of attacks.
The local currency could eventually benefit from a government deal to settle a row over paying past contracts, which clears the way for a debut Eurobond worth up to $2 billion.
"That paves way for the success of the Eurobond so maybe in two, three months from now, we will start seeing inflows coming in, which might protect the shilling from further weakening," Gatobu said.
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