NAIROBKI, May 31 (Xinhua) -- Kenyan shilling weakened Wednesday against the U.S. dollar as end-month dollar demand from retail importers surged.
The local unit closed Wednesday at 103.4 against the greenbuck from a high of 103.2 at last week. The Central Bank of Kenya (CBK) quoted the shilling at 103.38 to the dollar, from the previous day's 103.36.
On the other hand, commercial banks put the value of the Kenyan currency against the dollar at between 103.35 and 103.55.
Traders noted the shilling was under intense pressure from oil importers dollar demands despite inflows from charities and remittances from diaspora rising.
On Tuesday, the shilling dropped 0.01 percent against the dollar and on Monday, the currency fell 0.03 percent to 103.34.
Similarly, the shilling weakened against the British pound Wednesday to stand at 133.06 from 132.67. On a year to-date basis, the shilling has depreciated against the dollar by 0.8 percent.
Analysts noted that the shilling is likely to come under pressure in the coming week on account of the usual end month dollar demand but Kenya has taken precautionary measures.
"With the current forex reserve level, currently at 8.2 billion dollars or equivalent to 5.4 months of import cover, and the IMF maintaining Kenya's precautionary credit facility at 1.5 billion dollars or equivalent to 1.0 more month of import cover, Kenya can draw on in case of any balance of payment emergencies. We believe that the shilling should remain stable in the short term," noted Nairobi-based investment firm Cytonn. Enditem
