NAIROBI: The Kenyan shilling fell to a new three-year low on Thursday, hurt by dollar demand from energy companies, while shares fell on Kenya Airways' poor first-half results.
The shilling closed at 90.25/35 to the dollar, its lowest level since November 2011, down from Wednesday's close of 90.10/15, weakened by dollar demand from energy importers.
The shilling has fallen by about 4.6 percent against the dollar this year, mainly due to a slump in hard currency inflows from tourism following a spate of attacks by Islamic militants.
Traders said the local currency would fall further without intervention by the central bank, which has in the past sold dollars to support the local currency when the shilling touched 89.50 levels. Most traders were surprised when the bank did not do the same as the currency broke through the 90 mark.
The central bank governor told Reuters the shilling is likely to reverse its recent losses as the decline is driven by the strengthening of the US currency.
In the stock market, the benchmark NSE-20 share index finished 0.3 percent down at 5,123.45 points, weakened by Kenya Airways whose shares fell 8.5 percent to close at 8.65 shillings each after it reported a first-half loss and said annual profits would fall by a quarter.
In the debt market, bonds worth 940 million shillings were traded, down from 2.3 billion shillings traded the previous day.
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