The Kenyan shilling continued its losing streak against the US dollar, breaching the 95-point mark on May 5, 2015 as analysts said increased demand for the greenback against limited supply will lead to further weakening. FILE PHOTO |
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Traders expect the shilling - which has lost 1.1 per cent so far this year - to trade in the 91.50 to 92.00 range against the dollar in coming days.
The Kenyan shilling was steady against the dollar on Friday with dollar demand restricted by tight local currency liquidity that has led to rising interbank lending rates.
At 0743 GMT, commercial banks quoted the shilling at 91.65/75 to the dollar, from Thursday's close of 91.60/70.
Traders said there was importer dollar demand but tight shilling liquidity had kept the local currency from weakening. They said the central bank - which has stayed out of the market all week - was unlikely to inject money into the market to ease the shortage of local currency.
Tight liquidity makes it slightly more expensive for banks to hold dollars, thus cushioning the shilling.
On the interbank market, the weighted average lending rate rose to 8.4987 per cent on Thursday from 8.3325 per cent a day earlier, while volumes borrowed fell slightly to Sh27.42 billion from Sh27.8 billion a day earlier, showing an there was still a liquidity squeeze.
"No movement this morning. I guess the shilling is still getting support from overnight rates going up," a senior trader at one commercial bank said.
Traders expect the shilling - which has lost 1.1 per cent so far this year - to trade in the 91.50 to 92.00 range against the dollar in coming days.
