NAIROBI: The Kenyan shilling edged down against the dollar on Tuesday, under pressure from demand for greenbacks from a range of clients, traders said.
At 0710 GMT, commercial banks posted the shilling at 87.20/30 against the dollar, weaker than Monday's close of 87.05/15.
Traders said the currency could weaken towards 87.50/70in the next few days, barring any aggressive action by the central bank to curb volatility in the exchange rate.
The bank has frequently mopped up excess liquidity from the market using repurchase agreements in recent months, helping to maintain stability in the exchange rate.
"They could probably use it (repo) to tighten liquidity and make it expensive to short the shilling," said Chris Muiga, a
senior trader at National Bank.
Kenyan firms, who count an array of foreigners among their shareholders, usually buy dollars in mid-year to pay annual dividends, adding onto demand for dollars from importers in the energy and manufacturing sectors.
