NAIROBI: The Kenyan shilling held steady on Monday but traders said they expected it to ease due to a carry-over of dollar demand from the end of August.
At 0717 GMT, commercial banks quoted the shilling at 88.40/50 to the dollar, the same as Friday's close.
Traders said dollar demand that had carried over from the end of August would put pressure on the shilling. Typically demand for the US currency comes from importers in sectors such as manufacturing, energy and telecommunications.
"It is largely expected that the Kenya shilling will continue weakening against the dollar during the week due to some spillover of the August end-month demand," Bank of Africa said in its daily market report.
Traders said liquidity in the money markets would also determine the direction the shilling takes, given that a reverse repurchase agreement that injected 30 billion shillings into the market last week was maturing on Tuesday.
"From tomorrow we will wait to see if the liquidity will worsen. If it stays good, the shilling should continue being under pressure," said a senior trader at one commercial bank.
Traders said they expected the shilling, which has lost 2.1 percent against the dollar so far this year, to trade in a range of 88.20 to 88.80 in the coming days.
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