× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS
×

Kenya shilling hits one-month low

BUSINESS
By | March 16th 2012

The Kenyan shilling fell nearly 1 percent to a one-month low against the dollar on Friday on piled-up demand for the U.S. currency after electronic trading was disrupted in the country for two days.

A cut in an inland fibre optic cable on Monday affected Internet service providers and by Wednesday had interrupted normal trading of the commercial banks.

Traders said banks were also short-covering dollar positions, while reduced shilling liquidity before the start of a new cash reserve ratio cycle on March 15 and government disbursements were seen putting pressure on the local currency.

At 0708 GMT, commercial banks quoted the local currency at 83.40/60 per dollar, after weakening 0.8 percent to touch 83.45/65. Thursday's close was 82.75/95. The shilling last traded around this level on Feb. 6 when it touched 83.90 to the dollar.

"There was pent-up (dollar) demand from importers across the board," said Duncan Kinuthia, head of trading at Commercial bank of Africa.

Dickson Magecha, a trader at Standard Chartered Bank, said interbank dollar covering on thin volumes drove the shilling lower, with support seen at 83.65. "If we break that level, then we will go to 84 per dollar," said Magecha.

The weighted average interbank rate eased on Thursday to 26.4 percent with Sh7.88 billion ($95.23 million) borrowed among the commercial banks, down from 27.2 percent a day earlier.

"The high interest may be the only saving grace of the shilling because it makes holding long dollar positions costly," said Kinuthia.

—Reuters

Share this story
Eritrea says Ethiopian attack won't "entrap" it
Eritrea said on Friday an attack by Ethiopian forces inside its territory was provocative but would not "entrap" it, signalling reluctance to be sucked back into armed conflict with its bitter foe.
Dog walking becomes the newest hustle in town
Dog walking is now a status symbol. Owning a pet is cool. I nowadays meet lots of Kenyans and foreigners walking their dogs and some running.
.
RECOMMENDED NEWS
Feedback