NAIROBI: The Kenyan shilling was steady on Wednesday and traders said it was expected to be lifted by tea exporters selling dollars and the central bank's mopping-up of excess liquidity.
Stocks edged lower.
At the 1300 GMT close of trade, commercial banks quoted the shilling at 86.80/90 to the dollar, compared with Tuesday's closing rate of 86.85/95.
"We saw some flows coming in yesterday from tea and that is what maybe has support the local unit. That's why it's not breached the 87 level, but there are still remnants of demand," said Duncan Kinuthia, head of trading at Commercial Bank of Africa.
During Tuesday's session, the shilling touched 87.00/87.10, its weakest in more than three months.
"Demand is dying out at this level, and in anticipation of the long weekend coming up, most guys will be squaring positions. So we might gain slightly," said Sheikh Mehran, senior trader at Kenya Commercial Bank.
Mehran said in addition to tea sector dollar sales, the shilling had also been supported by inflows from prospective offshore investors in a five-year bond worth up to 15 billion shillings, due to be auctioned on April 23.
Traders said the shilling, which has lost 0.3 percent since the start of the year, will also get some support from the central bank's mopping-up of excess liquidity.
The central bank has frequently drained liquidity over the past month after overnight domestic borrowing rates tumbled, making it cheaper for banks to fund long dollar positions, thereby putting pressure on the shilling.
On the Nairobi Securities Exchange, the main NSE-20 Share Index fell by 3.95 points, or 0.08 percent, to 4,906.96 points.
Shares in TransCentury closed 12 percent lower after falling as much as 26 percent to 20 shillings a share, near a low it last touched on Oct. 24, 2012.
The company said on Wednesday its sale of a 34 percent stake in Rift Valley Railways (RVR) would erode its profit by 25 percent for the year to the end of December.
"It was the disappointing numbers. If you look at the full year numbers they released before the session opened, and then they also issued a profit warning for 2014," Eric Musau, research analyst at Standard Investment Bank, said.
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