NAIROBI: Kenya’s shilling weakened to a new three-and-a half year low against the dollar on Friday, hurt by dollar demand from telecoms, manufacturing and energy sectors and banks covering short positions, traders said. At 11.32 am, commercial banks quoted the shilling at 101.20/30 to the dollar, compared with Thursday’s close of 100.75/85. It is trading at a level last seen in October 2011.
“During the week there was demand from telecoms and also a few in the oil sector. But telecoms and then manufacturers (too),” a senior trader at one commercial bank said.
The trader said they were on the look-out for any action from the central bank that will keep it from weakening further.
“As it continues going up (weakening) and we are not seeing any support from central bank, people who have genuine demand have no choice but to meet their demand,” the trader said.
The bank last sold dollars in late May when the shilling hit 98.95/99.05.
The central bank, which usually does not comment on its activities in the foreign exchange market, has in the past sold dollars directly to commercial banks whenever it has deemed it necessary to step in to curb volatility. Traders said the shilling was expected to remain under pressure in coming days, in line with technical analysis of the 14-day and 50-day weighted moving averages, which suggest the shilling would stay on a weakening trend in the near term.
“There’s still more demand to come,” a second trader at another commercial bank said.
