NAIROBI: The Kenyan shilling was steady on Friday, with demand for the US currency being balanced by the central bank mopping up liquidity, while stocks recovered from the previous day's dip.
At close of trade at 1300 GMT, commercial banks quoted the shilling at 88.60/70 per dollar, the same as Thursday's close.
Traders said demand for the US currency was balanced by offshore bank sales and a liquidity mop-up by the Central Bank of Kenya.
On Friday the bank absorbed 10 billion shillings using seven-day repurchase agreements at a weighted average rate of 8.324 percent.
The central bank has regularly soaked up excess liquidity from the money market since last year, which has lent support to the shilling by making it more expensive for banks to hold long dollar positions.
"We have seen some interbank demand coming through, and also some enquiries from the energy sector, but the pressure on the shilling was mitigated by the repo," said a senior trader at one commercial bank.
But the shilling could still face weakness next week due to scant dollar inflows from sectors like tourism.
Traders said they forecast the shilling, which has lost 2.2 percent to the dollar so far this year, to trade in the 88.50 to 89.00 range in coming days.
On the Nairobi Securities Exchange, the main NSE20 Share Index was a slight 0.06 percent higher, or 3.17 points, to close at 5,160.32 points.
Centum Investment continued its rally, rising by 1.8 percent to close at 55.50 shillings a share.
The stock has been buoyant since Centum announced that, together with its local partner, it had won a government tender to build a 1,000-MW, coal-fired power plant.
On the secondary market, government bonds valued at 1.6 billion shillings ($18.08 million) were traded, down from 4.4 billion shillings traded on Thursday.
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