ANL 34.15 Decreased By ▼ -0.37 (-1.07%)
ASC 15.04 Decreased By ▼ -0.12 (-0.79%)
ASL 24.58 Decreased By ▼ -0.25 (-1.01%)
AVN 93.66 Decreased By ▼ -1.34 (-1.41%)
BOP 7.85 Decreased By ▼ -0.02 (-0.25%)
BYCO 10.13 Decreased By ▼ -0.18 (-1.75%)
DGKC 126.40 Decreased By ▼ -0.20 (-0.16%)
EPCL 57.00 Decreased By ▼ -0.16 (-0.28%)
FCCL 24.43 Decreased By ▼ -0.07 (-0.29%)
FFBL 28.00 Increased By ▲ 0.04 (0.14%)
FFL 16.50 Increased By ▲ 0.46 (2.87%)
HASCOL 9.91 Decreased By ▼ -0.11 (-1.1%)
HUBC 79.65 Decreased By ▼ -0.35 (-0.44%)
HUMNL 6.67 Increased By ▲ 0.22 (3.41%)
JSCL 20.75 Increased By ▲ 0.34 (1.67%)
KAPCO 40.10 Decreased By ▼ -0.84 (-2.05%)
KEL 3.88 Increased By ▲ 0.01 (0.26%)
LOTCHEM 16.40 Decreased By ▼ -0.84 (-4.87%)
MLCF 47.02 Increased By ▲ 0.11 (0.23%)
PAEL 35.95 Decreased By ▼ -0.22 (-0.61%)
PIBTL 10.44 Decreased By ▼ -0.05 (-0.48%)
POWER 9.30 Decreased By ▼ -0.05 (-0.53%)
PPL 84.95 Decreased By ▼ -0.79 (-0.92%)
PRL 25.30 Decreased By ▼ -0.41 (-1.59%)
PTC 9.67 Increased By ▲ 0.22 (2.33%)
SILK 1.21 Increased By ▲ 0.04 (3.42%)
SNGP 38.80 Decreased By ▼ -0.56 (-1.42%)
TRG 167.00 Increased By ▲ 7.39 (4.63%)
UNITY 30.54 Decreased By ▼ -0.21 (-0.68%)
WTL 1.52 Increased By ▲ 0.09 (6.29%)
BR100 4,849 Decreased By ▼ -3.06 (-0.06%)
BR30 25,768 Increased By ▲ 96.24 (0.37%)
KSE100 45,098 Decreased By ▼ -87.99 (-0.19%)
KSE30 18,476 Decreased By ▼ -9.26 (-0.05%)

Coronavirus
VERY HIGH
Pakistan Deaths
15,501
5824hr
Pakistan Cases
725,602
458424hr
Sindh
269,126
Punjab
250,459
Balochistan
20,321
Islamabad
66,380
KPK
99,595
Markets

Kenya shilling weakens vs dollar, central bank to support

NAIROBI: Kenya's shilling weakened nearly one percent on Wednesday weighed by dollar demand mainly from the energy secto
04 Jan 2012

shillingNAIROBI: Kenya's shilling weakened nearly one percent on Wednesday weighed by dollar demand mainly from the energy sector, but traders said they expected the central bank to sell dollars and mop up shillings in a bid to stem a further slide.

At 0756 GMT, commercial banks quoted the shilling at 86.30/50 against the dollar, 0.8 percent weaker than Tuesday's close of 85.50/70.

The Central Bank of Kenya (CBK) sought on Tuesday to mop up 5 billion shillings ($58.5 million) through repurchase agreements, but did not receive any bids as banks keen on maintain their liquidity stayed away.

The bank was criticised heavily for failing to take early decisive measures to curb the shilling from tumbling against the dollar for the better part of last year.

Traders said they expected the shilling to weaken in the days ahead as more market participants return from the holidays.

"Importers who held off making orders during the holidays are back buying dollars, especially from the petroleum sector," said Peter Mutuku, head of corporate trading at Bank of Africa.

Traders said they expected the local currency to decline steadily this week to a low of 86.50, pressured by importers demand for dollars, but inflows from the tea sector were seen providing some support after the auction on Wednesday.

Tea is a major export for the east African nation, and is seen generating a record 106 billion shillings ($1.2 billion) in earnings in 2011, up from 97 billion shillings in 2010.

"Demand for dollars from guys returning from the holiday is heavy on the shilling," said Julius Kiriinya, a trader at African Banking Corporation.

"CBK has been trying to shore up the shilling by selling dollars, but demand seem to be too much. They may be back in today."

Copyright Reuters, 2011