Cargo containers at the Mombasa port. The shilling has come under
pressure this year due to a growing current account deficit over
slowdown in forex inflows and growing import pressure. PHOTO | FILE
The Central Bank Monday sought to buy
shillings from the market by selling dollars as demand for greenback
soared on heightened demand.
CBK is reported to have sought to mop up Sh12 billion from the market but it is not yet clear how much was offered.
Traders said increased end month demand for dollars from importers was weighing down the currency.
On
Monday Greeks woke up to shuttered banks and cash machines over a
breakdown in talks with their creditors, reflecting a deepening crisis.
Commercial
banks quoted the shilling at 98.55/98.65 in the morning trading
sessions, weaker than 98.35/98.45 at which it closed trading on Friday.
“The
weakness was as a consequence of the weakness in the Euro, which has
come under pressure from dollar strength over the Greece debt crisis,”
said an analyst at a commercial bank.
MANUFACTURERS
Pressure
on the shilling has also mounted following increased dollar demand from
manufacturers and energy importers buying the greenback to satisfy end
month import orders.
The shilling
has come under pressure this year due to a growing current account
deficit over slowdown in forex inflows and growing import pressure.
Insecurity
perpetuated by the Al Shabaab has also hit the tourism sector hard,
keeping away tourists. As a consequence, forex inflows from tourism, one
of the largest foreign exchange earners, have declined.
At the close of trading on Friday, the shilling registered a marginal gain to the dollar aided by tight liquidity and reduced dollar demand in the market.
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