Shilling hits fresh three-year low, traders see further pressure

The Kenyan shilling touched a fresh three-year low yesterday, with traders saying dollar demand from the energy sector could further weaken the local currency.

The shilling was quoted at 94.40/50 to the dollar, after closing at 94.20/30 to the dollar on Friday. Traders said the shilling was unlikely to stabilise unless Central Bank offered support by selling dollars, as it has in the past week.

One trader at a major bank said he would “not rule out” the shilling weakening to 95 to the dollar.

“It depends on importers. If... they come and buy aggressively, then we should see it tumble beyond the 95 level,” the trader said, adding that the energy sector was one of the main sources of imports.

The shilling has been hit by a slowdown in foreign exchange revenues from tourism after militant attacks scared visitors away.

“This is a continuation of a trend where we see the shilling touch new lows almost on a daily basis,” said Joshua Anene, a trader at Commercial Bank of Africa.”