Kenya shilling falls on huge dollar demand for food imports

The Kenya shilling for the second day running lost ground against the U.S. dollar Thursday as sugar and maize importers sustained dollar demand.

The shilling closed the day trading against the dollar at 103.4 down from 103.3 the previous session.

The Central Bank of Kenya quoted the local unit at 103.4 against the dollar, a decline of 0.05 percent.

On the other hand, commercial bank traders put the value of the shilling against the dollar at 103.3 and 103.5 as they attributed the fall to food importers demands.

The shilling, on Wednesday, dropped 0.11 percent against the dollar, as it also weakened against the British Pound 0.02 percent to close at 133.32.

Kenya is currently making huge food imports mainly maize and sugar following an acute shortage.

The government at the beginning of the month allowed traders to bring in duty free maize as it initiated a subsidized program on Tuesday.

Last week, Kenya, which is facing a huge shortage, received 350,000 tonnes of maize reportedly from Mexico.

On the other hand, the government has ratified the importation of an additional 400,000 tonnes of sugar in the next three weeks to meet the demand.

Cytonn, a Nairobi-based investment firm expects the imports to continue putting pressure on the shilling leading to its decline. Endit