NAIROBI: The Kenyan shilling weakened against the dollar on Wednesday as excess liquidity and dollar demand across the board put pressure on the local currency.
At 0815 GMT, commercial banks posted the shilling at 87.90/88.00 per dollar, weaker from Tuesday's close of 87.70/80.
"It seems the market is flush with Kenya shillings," said Andlip Nazir, senior trader at I&M Bank.
The central bank has regularly intervened to mop up shilling liquidity via repurchase agreements and other instruments, and in recent weeks traders said it had also sold dollars.
Traders widely expect the bank to sell dollars again if the currency comes under more pressure.
The bank sought to drain 5 billion shillings ($56.88 million) of excess liquidity from the money market on Wednesday by using repurchase agreements.
Nazir said the local currency has also been hurt by strong dollar demand from all sectors. He said both corporates and individuals were buying greenbacks.
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