The Kenyan shilling lost its previous day's gains against the dollar yesterday, weighed by importers buying greenbacks after the local currency broke the 84.00 resistance level and by commercial banks covering their short US currency positions. At 0814 GMT, commercial banks quoted the shilling at 84.00/20 per dollar, weaker than Tuesday's close of 83.90/84.10. "Customer are taking advantage of the good rate after the shilling strengthened yesterday. We've seen demand from the energy guys and some banks covering their short positions," said John Muli, a trader at African Banking Corporation. "We still are expecting it to strengthen on the back of the Central Bank mopping liquidity and inflows from agriculture and debt buyers." The shilling has gained 1.5 per cent against the dollar this year, helped by the central bank's tight monetary policy stance, which it adopted late last year to prop up the currency and fight inflation. The shilling could also benefit from foreign investors coming into the debt market after yields on the repos and the interbank market fell below those on bills, leading investors to prefer the government papers.

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