The Kenyan shilling fell to a three-week low as analyst forecast it would come under pressure in the coming days due to heightened demand for dollars and falling foreign inflows.
“Our near term outlook for the home unit versus the US unit is bearish on account of dwindling foreign currency inflows and as activity continues to pick up on demand counter,” said CBA analysing the activity of recent days.
Reuters reported central bank sold dollars on Thursday in a session in which the shilling weakened to its lowest level in three weeks due to increased dollar demand from retail goods and oil importers, traders said.
The news agency said commercial banks quoted a low of 102.00 per dollar in early trading compared with 101.35/55 at Wednesday’s close.
The currency has lost some ground against the greenback over the past two sessions amidst revelations that the International Monetary Fund had blocked Kenyan access to $1.5 billion (Sh152 billion) standby credit facility until it fulfils some conditions.
“The local currency came under pressure in the midweek session on an uptick in dollar demand by the importers,” said CBA.
The impact of Kenya having raised over Sh200 billion in a new Eurobond is expected to be seen in the near future.
The new money was, however, raised at a slightly higher yield than in the previous international fund raising events.