The Kenyan shilling fell to a three-week low Tuesday continuing in the direction started on Monday.
Data from the Central Bank of Kenya (CBK) showed that the shilling traded at 100.73 units to the dollar in the morning Tuesday compared to 100.49 on Monday and 100.36 last Friday.
The local currency had been on appreciating trend for the three weeks hitting a high of Sh100.35 to the greenback on August 3 before beginning to depreciate to the 100.36-100.49 range in the interim period.
The trading in the weakened mode Tuesday had already been predicted by analysts on the basis of Monday’s trading outcome. “We see the shilling trading defensively today [Tuesday] as sustained dollar demand continues to manifest itself in the local currency market,” said Commercial Bank of Africa in its daily analysis. The bank said the weakening of the currency was caused by increased dollar demand.
Quoting traders, Reuters news agency reported on Monday the shilling was expected to strengthen against the dollar but the reverse happened.
in the opposite direction – weakening yesterday.
The agency based the prediction on expected inflows from offshore investors buying government debt and tight liquidity in the money market.