Shilling eases versus dollar, further losses seen
13 February 2014, 13:27
Nairobi - The shilling weakened on Thursday, undermined by increased demand for the dollar from commercial banks and corporate clients, amid falling overnight lending rates.
At 0754 GMT, commercial banks quoted the shilling at 86.35/45 to the dollar, compared with Wednesday's close of 86.25/35.
"It's due to mild corporate demand that is setting in. It's also a result of overnight rates plummeting," a senior trader at one commercial bank said.
The weighted average interbank lending rate fell to 8.3316 percent on Wednesday from 9.2185 percent a day before, pointing to increased liquidity in the money markets.
Traders said they expected the shilling, which has gained 0.27 percent against the dollar since the start of the year, to experience more pressure in coming sessions.
"A surge in mid-month corporate demand should see the home unit weaken further," Commercial Bank of Africa said in its market report.