Kenyan shilling edges up, stocks drift lower
17 December 2013, 08:49
Nairobi - The Kenyan shilling inched up on Monday due to sluggish demand for dollars and tightening liquidity in the money markets, while shares closed slightly down.
At 1300 GMT, commercial banks posted the shilling at 86.35/45 against the dollar, slightly up from last week's close of 86.40/60.
Mid-month tax payments by firms and sluggish appetite for dollars from importers ahead of the holidays were likely to keep the shilling well supported in a band of 86.20-86.70, traders said.
"We started seeing some tightness in the market," said Robert Gatobu, a trader at Bank of Africa.
The weighted average interest rate on the overnight borrowing market for banks rose to 7.4660 percent on Wednesday from 7.0142 percent the previous day.
Kenyan markets were closed last Thursday and Friday to mark the country's 50 years of independence.
The shilling is usually supported in the run-up to the Christmas holidays by increased dollar inflows from tourists and Kenyans living abroad.
In the stock market, the benchmark NSE-20 share index lost 1.19 points to close at 4,912.36 points as investors cashed in on this year's strong gains.
"To a large extent there is selling but it's not very severe," said Eric Musau, a research analyst at Standard Investment Bank.
The index has lost just over 3 percent since December 3 as investors started booking their gains for this year. The index has gained 18.6 percent in the year to date.