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Kenya shilling gains after central bank dollar sale

04 December 2014, 08:54

Nairobi - The Kenyan shilling gained late on Wednesday after the central bank sold dollars shortly before the close. The main share index slipped 1.1 percent.

At the 1300 GMT close, the shilling traded at 90.10/20 to the dollar, compared with 90.35/45 before the central bank offered dollars.

On Tuesday, the shilling had ended at 90.30/40.

"They (central bank) have sold dollars directly to the market. So that has definitely boosted the shilling's fortunes," said a trader at one commercial bank who did not wish to be named.

A second trader confirmed the central bank's action.

Most of the session, the shilling had traded close to a three-year low after an Al Shabaab attack in Mandera and Wajir unnerved investors. 

Frequent attacks by the insurgents this year have scared tourists away from Kenya, cutting into a major source of foreign
exchange and putting pressure on the shilling.

Tuesday's attack in the northeast and one about 10 days earlier killed more than 60 people, casting a shadow over tourism in the usually busy Christmas and New Year period.

The central bank generally does not comment on dollar sales.

On the stock market, the NSE-20 index was down 59.20 points, or 1.1 percent, to close at 5,111.37 points, dragged lower by cigarette maker British American Tobacco, whose shares fell 9.2 percent to end at 819 shillings.

"After book closure for the interim dividend, it was sort of ripe for profit-taking on the gains made on the stock," said Silha Rasugu, research analyst at Genghis Capital.

On the secondary market, government bonds valued at 917.55 million shillings were traded, compared with Tuesday's 2.07

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- Reuters


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