Kenya shilling slides further on high sugar, oil importers' dollar demand

The Kenya shilling lost more ground against the U.S. dollar Thursday, going down 0.11 percent to close the day at 103.3 amid rising dollar demand.

The fall was a continuation from Wednesday, where the local unit fell 0.05 percent following increased dollar demand from oil and sugar importers.

The Central Bank of Kenya quoted the shilling Thursday at 103.32 from the previous day's 103.2 as the currency yielded to pressure.

Commercial banks, however, placed the value of the shilling at between 103.2 and 103.5, as analysts noted the negative trend would continue in the next days.

The shilling remained relatively stable against the dollar last week to close at 103.1 before starting to fall from Tuesday.

Cytonn, a Nairobi-based investment firm, noted that the shilling is likely to be under pressure in coming weeks on account of increased dollar demand from oil and sugar importers.

"It is cheaper for oil importers to increase purchases now before prices begin on an upward trend, and as production of sugar declined due to low rainfall experienced in October and November 2016, the government has to import an additional 400,000 tonnes in the next three weeks to meet the demand for sugar in the country, thus, putting pressure on shilling," said Cytonn. Endit