Kenyan shilling weakens as traders meet dollar demands

NAIROBI (Reuters) – Kenya’s shilling weakened slightly on Monday, with banks coming into the market to buy dollars to meet anticipated demand and square their positions.At 0750 GMT, commercial banks quoted the shilling at 91.25/35 to the dollar, compared to Friday’s close of 91.15/25 per dollar.”Guys have come in to take advantage of the lower rates to meet some of their demands,” said Martin Runo, a senior trader at Chase Bank.”Once the shilling started strengthening, of course guys went short. So there is a bit of profit-taking.”Kenya will sell a 12-year infrastructure bond worth up to 25 billion shillings ($274 million) on March 25. One trader said last week the market was expecting foreign uptake of the bond to be around 60 percent.Runo, as well as a second trader at a major commercial bank in Kenya, both said they expected to see the shilling stay in the 91.00/50 range in the coming days.”I think in the short term there still is a positive sentiment,” Runo said, adding the shilling has been getting support from regular liquidity mop ups by the central bank.