Kenya shilling weakens vs dollar on position squaring
29 December 2011, 12:59
Nairobi - Kenya's shilling extended losses against the dollar on Thursday on the back of banks squaring their positions ahead of the new year, compounded by a broadly weak euro and thin volumes, traders said.
The shilling fell nearly 1 percent, the biggest intraday fall since Oct. 26. The local currency has lost 1.5 percent this week, although it remains well above a record low of 107 in October before an aggressive tightening of monetary policy.
At 0730 GMT, commercial banks posted the shilling at 84.90/85.10 to the dollar, 0.9 percent weaker than Wednesday's
close of 84.15/25.
"Banks are squaring positions ahead of the new year," Sameer Lagadia, head of trading at Diamond Trust Bank said. "There was also a weakening of the euro affected by poor liquidity towards the year-end in the eurozone."
Kennedy Butiko, deputy head of trading at Bank of Africa said the market was thin, leading to exaggerated moves on small
order, after some interbank greenback purchases.