NAIROBI: Kenya's shilling firmed on Wednesday after banks sold dollars to unwind their long positions in the face of scant demand so far this week, while stocks were down for a second day.
At close of trade at 1300 GMT, commercial banks quoted the shilling at 91.15/25 to the dollar, compared with Tuesday's close of 91.25/35. It firmed to an intra-day high of 91.00/20 during the session before reversing some gains.
"We have seen modest gains on the shilling. I think a number of banks were seated long. They maybe opted to cut their long dollar positions. It's a bit slow on the demand side," Robert Gatobu, trader at Bank of Africa, said.
The shilling has in the past week also received support from regular liquidity mop ups by the central bank.
On Wednesday, the central bank mopped up 2.10 billion shillings ($23.06 million) from the money markets, which partly lent support to the shilling by making it costlier to hold dollars.
Traders say the shilling is expected to traded between 91.20 to 91.50 in coming days.
On the Nairobi Securities Exchange the main NSE-20 Share Index fell 13.37 points or 0.2 percent to close at 5,461.08 points.
East African Breweries ended 1 percent lower at 295.00 shillings.
"For EABL, it must be the correction. Since announcing the half year results, we saw a rally. So I think we are still going through a correction," Virginia Wairimu, a research analyst at Suntra Investment Bank, said, referring to a 12 percent rise in the brewer's interim pretax profits.
On the secondary market, government bonds valued at 4.57 billion shillings were traded, down from 5.45 billion shillings traded on Tuesday.
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