Kenya shilling slips on corporate dollar demand, shares edge up

NAIROBI: Kenya's shilling weakened modestly on Monday due to corporate demand for dollars, while the benchmark share index edged up.

At 1300 GMT when the Kenyan market closed, commercial banks posted the shilling at 90.20/30 per dollar, compared with Friday's finish of 90.10/20.

Companies tend to buy dollars at the end of the month but some were still seeking the US currency on Monday, said Chris Muiga, senior trader at National Bank of Kenya.

"There's spillover demand from the end of the month," he said, adding sometimes demand for dollars emerged earlier in December than other months because of approaching holidays.

Traders said higher shilling liquidity was helping push the Kenyan currency lower. Overnight lending rates for banks fell to 7.0045 percent on Friday from 7.11756 percent the previous day.

The shilling is down about 4.6 percent this year, mainly because of militant attacks that have damaged the tourism industry, a key source of hard currency.