NAIROBI: Kenya's shilling strengthened from three-year lows on Friday after the central bank intervened to support the currency by selling dollars. Stocks rose.
The shilling closed at 89.90/90.0 to the dollar, compared to Thursday's close of 90.25/35 - its lowest level since November 2011.
The central bank has in the past sold dollars to support the currency when it touched 89.50 levels. Most traders had anticipated action when it broke through the 90 level this week.
The shilling has fallen by about 4.3 percent against the dollar this year, due to a slump in hard currency inflows from tourism following a spate of attacks by Islamic militants.
Tea export inflows have been hit by a global glut.
The dollar has also recently strengthened against other currencies.
Martin Runo, a senior trader at Chase Bank, said he still expected the shilling to remain under pressure.
"The shilling has a weaker bias, there is dollar demand from the oil sector and manufacturers, while there are only minimal inflows from tourism and agriculture," Runo said. "However, if the central bank persists in selling dollars, the shilling could stay below the 90-level to the dollar."
In the stock market, the benchmark NSE-20 share index rose 0.3 percent or 15.92 points to 5,139.37 points.
Among the gainers was Bamburi Cement, which added 2 percent to end at 149 shillings, buoyed by its plans to supply cement to big infrastructure projects, including a planned new railway, Old Mutual Securities said in a research note.
In the debt market, bonds worth 5 million shillings ($55,617) were traded, down from 940 million shillings traded the previous day.
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