Kenyan shilling slips in early trade, hurt by dollar strength

by Reuters 0

The Kenyan shilling slipped modestly in early trading on Tuesday, pushed lower by local demand for dollars and the strength of the U.S. currency in global markets.

By 0648 GMT, the shilling was trading at 97.65/75 to the dollar, compared with Friday’s close of 97.45/55. Kenyan markets were closed on Monday for a national holiday.

A trader at a commercial bank in Nairobi said attention was on the central bank to see if it would sell dollars as it did on Thursday.

That intervention lifted the shilling from around 99 to the dollar, but traders said the Kenyan currency could slip back again without more central bank support.

“The global dollar strength is pushing it (lower),” said another trader, adding: “There is demand for dollars.”

The shilling has been undermined by a stronger dollar, falling foreign exchange inflows due to reduced tourist arrivals after frequent Islamist militant attacks, and a widening current account deficit as importers demand dollars for capital goods.