Kenya shilling slips on blast, dollar demand
29 May 2012, 07:54
Nairobi - The Kenyan shilling as much as 0.3 percent against the dollar on Monday when the
unsettling effects of a blast in central Nairobi added to
end-month importer demand for dollars, traders said.
The central banks sold an unspecified amount of dollars
later in the session, traders said, helping the local currency
pare some losses and close at 85.45/65, still weaker than
Friday's close of 85.30/50.
"We have seen a bit of depreciation on the local currency.
It's right in the central business district, so it's not very
good news to be getting, and I think that causes some fear,"
said Duncan Kinuthia, head of trading at Commercial Bank of
Kenyan police said it was not possible to rule out a bomb
attack and Prime Minister Raila Odinga said Kenyans would not be
cowed by "terrorists".
The shilling gained 0.1 percent late in the session.
"Central bank was in the market selling dollars in the
afternoon," said one trader who declined to be named.
The central bank also mopped up a total 8.75 billion
shillings using repurchase tenders (repos).
Monday's fall saw the shilling extend its losing streak to
nine days. The shilling is down 0.3 percent against the dollar
so far this year.
Traders said technical analysis showed dollar resistance at
Falling government bond yields, a global rush to safety into
the dollar and the possibility of a Greek exit from the euro,
compounded pressure on the currency of east Africa's biggest
economy last week.
On the Nairobi bourse, Uchumi Supermarkets fell the maximum
10 percent allowed for the second straight trading session to
15.50 shillings as investors booked profits.
Uchumi is ranked best performer on the Kenyan bourse this
year, up 129 percent in 2012 on the back of expansion plans and
expectations of a first dividend since the company was delisted
in 2006. It was relisted in May last year.
"It's been pulling back after rallying last week. We are
seeing aggressive profit taking and it could continue," said
Johnson Nderi, head of research at Suntra Investment Bank.
In the fixed income market, 2.09 billion shillings were
traded, up from 1.16 billion shillings on Friday, with almost
half of the activity on a 12 year infrastructure bond. It traded
at a yield of 13 percent.