Kenya shilling weakens to near 5-year low

The Kenyan shilling weakened against the dollar to a near five-year low on Tuesday due to importer demand and excess liquidity in the money markets, traders said.

At 10:47 am local time, commercial banks quoted the shilling at Sh104.25/35 per dollar, compared with Sh104.05/15 at Monday’s close.

The last time the shilling traded at these levels was on October 2, 2015, when it touched 104.40/50, Refinitiv data showed.

“The reason for the weakening is liquidity-driven, though we are now at the end of the month and increased end month dollar demand could also come into play,” said a senior trader from a commercial bank.

Last week, central bank governor Patrick Njoroge dismissed the market’s concerns about the impact of graft charges against the finance minister and attributed the week’s fall in the currency to seasonal demand for dollars and to excess liquidity in the money markets.