Kenyan shilling extends losses as energy firms seek dollars
24 September 2014, 08:36
Nairobi - Shilling weakened in early trade on Tuesday due to demand for dollars particularly by energy importers, and traders said the currency could extend losses unless the central bank offered support.
The central bank sold dollars on Thursday and Friday last week in a bid to boost the currency, which has been under pressure in part because of a slowdown in revenues from tourism, a sector that has been hit hard by worries about security.
At 0750 GMT, the shilling was trading at 88.95/89.15 to the dollar, compared with Monday's close of 88.80/90.
"We have got a bit of strong demand for dollars," said Chris Muiga, a senior trader at National Bank of Kenya, adding that energy importers and telecoms firms were seeking greenbacks.
Another foreign exchange dealer at a commercial bank said energy firms had met tax payments earlier in the month and were now flush with shillings to convert into hard currency.
"The fundamentals don't support a stronger shilling, it should continue to weaken," he added.
The central bank has not indicated whether it would intervene again or at what point, but traders said the bank could offer dollars if the shilling slides to the 89.50 level.
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