Kenyan Shilling Weakens Further Against US Dollar

The Kenyan Shilling weakened further on Thursday as a result of heavy dollar demand especially from the telecoms and energy sectors and the weakening is set to continue in the days to come as firms buy greenbacks to meet their end month obligations.

At 0730 GMT on Thursday the shilling was posted trading at 103.45/103.55 against the US Dollar by commercial banks.

There are concerns that the shilling might weaken further to 104.00 against the dollar by the end of next week as enterprises begin buying dollars to meet their regular end-of-month obligations.

The central bank for instance sought to mop up 10 billion shillings from the market as a result of excess liquidity.

The central bank frequently mops up excess funds from the market, using repurchases agreements and term auction deposits, and in the process, making it expensive for banks to bet against the dollar.

Market experts have predicted that the shilling is prone to remain under heavy pressure, hurt by a wide current account deficit and source of tourism receipts due to dwindling visitor numbers following a spate of attacks by the Somali militants.