NAIROBI: The Kenyan shilling weakened on Wednesday due to dollar demand from importers in the energy and telecommunications sectors, while stocks rose for the fourth straight session.
At close of trade at 1300 GMT, commercial banks quoted the shilling at 88.75/85 to the dollar, compared with Tuesday's close of 88.60/70.
John Muli, trader at African Banking Corporation, said demand was overwhelming the trickle of dollars into the market, but the central bank was helping to support the local currency by mopping up excess liquidity.
During the session the central bank mopped up 4.66 billion shillings from the money markets. On Tuesday, the bank absorbed 5 billion shillings ($55 million) from the money markets in excess liquidity.
The central bank's action of removing excess liquidity from the money market lends support to the shilling by making it more expensive for banks to hold long dollar positions.
Traders said they forecast the shilling to trade in the 88.50-89.30 range in coming days.
On the Nairobi Securities Exchange, the main NSE-20 Share Index was up slightly by 0.1 percent or 7.12 points to close at 5,190.01 points.
On its second day of trading, demutualised Nairobi Securities Exchange's shares surged 9.5 percent to 17.85 shillings. The exchange's initial public offer had been oversubscribed, and the appetite for the stock has kept the stock rising from its listing price of 9.50 shillings.
On the bonds markets, government bonds valued at 1.8 billion shillings ($20 million) were traded, down from 2.71 billion shillings on Tuesday.
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