Shilling slips, traders see further weakening

The Shilling weakened against the dollar on Friday and traders said it would slide further, hurt by concerns about rising imports and falling tourism revenues.

At the close of trade, the shilling was posted at 95.400/50 to the dollar, down from Thursday’s close of 95.25/35. Bobby Otieno, treasurer at Ecobank Kenya, said some importers were frontloading their dollar requirements due to worries over the weakening of the shilling, thus driving up demand.

“They are hedging their foreign exchange exposure ... because the fundamentals are pointing to a weaker shilling,” Otieno said.

Chris Muiga at the National Bank of Kenya said the shilling would extend losses on concerns about the current account deficit, as a growing economy sucks in imports, and about a slump in tourist revenues after a spate of Islamist militant attacks scared off visitors.

The Government has said Kenya’s economy will grow by about 6.9 percent in 2015. The shilling has dropped by about 5.5 percent this year, also hurt by the dollar’s strength globally.

On the stock market, Nairobi’s main NSE-20 share index barely changed, shedding just 4.00 points to close at 5,070.75 points. Shares have been hit by shallow bouts of profit taking in recent sessions.