Kenya shilling slides marginally as dollar demand rises

NAIROBI, Dec. 5 (Xinhua) -- The Kenya shilling weakened on Tuesday weighed down by increased demand for U.S. dollars by importers.

The shilling traded at an average of 103.05 to the dollar, a decline from a month-high of 103.00 where it rose last Friday and stayed firm Monday.

The Central Bank of Kenya quoted the currency in the Tuesday trading at 103.06, a 0.02 percent decline from previous session's 103.03.

Commercial banks in the East African nation, on the other hand, placed the currency at between 103.05 and 103.15, a slight decline from 102.95 and 103.15 on Thursday.

Forex traders in the financial institutions blamed the decline to increased dollar demand from retail importers, with their needs for dollars outweighing inflows from agriculture sector and from foreigners investing at the debt market.

To the British pound, the shilling gained by 0.38 percent to close at 139.38 from 138.86 in the previous session.

Despite the decline, analysts observed that the shilling would remain stable against the dollar in the short-term.

It would be supported by the calmness in the political front following the swearing in of President Uhuru Kenyatta and the high forex exchange reserves which currently stand at 7.1 billion dollars, an equivalent of 4.7 months of import cover, according to the apex bank. Enditem