NAIROBI: Kenya's shilling eased slightly to hover at 3-year lows on Wednesday on moderate dollar demand from companies, while stocks inched higher.
At close of trade at 1300 GMT, commercial banks quoted the shilling at 90.15/25 to the dollar, compared with Tuesday's close of 90.10/20.
"It has weakened a bit. There was a bit of demand, not much, nothing to write home about," Chris Muiga, senior trader at National Bank of Kenya, said, adding that the local currency would trade with a weakening bias in the next few weeks.
"We may have a weaker shilling at least until early to mid-December, when corporate dollar demand dies out, because of the holiday season."
Traders said most buyers had stayed out of the market when the shilling weakened to around 90.30 to the dollar, the level where the central bank intervened last week by sell dollars. The shilling briefly strengthened, but has weakened again since.
Duncan Kinuthia, head of trading at Commercial Bank of Africa, said banks were careful not to be caught holding long dollar positions when the central bank sells dollars.
The central bank has previously said it had enough reserves to support the shilling.
Traders said the currency was likely to hover in the 89.80 to 90.50 range in the coming days.
On the Nairobi Securities Exchange, the main NSE-20 Share Index rose marginally by 0.2 percent or 8.23 points to close at 5,117.08 points.
Among the gainers was Kenya's biggest power producer Kenya Electricity Generating Company (KenGen), which rose 5.5 percent higher to 10.60 shillings. The company has announced plans to raise generation capacity in the east African nation.
On the secondary market, government bonds valued 6.1 billion shillings ($67.67 million) were traded, compared with 3.46 billion shillings on Tuesday.
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