The Kenyan shilling eased on Friday as importers from the energy sector and some commercial banks bought dollars to cover short positions ahead of the weekend, traders said, while stocks edged marginally lower. By 1300 GMT, commercial banks were quoting the shilling at 86.60/70 to the dollar, compared with Thursday's close of 86.55/65.
Nahashon Mungai, Kenya Commercial Bank trader, said volumes were thin during the session with banks covering interbank positions. "That puts a bit of pressure on the shilling." The central bank said on Friday it was seeking to take out 12 billion shillings ($140 million)from the money market to drain excess liquidity. It mopped up 11.85 billion shillings.
The bank has frequently absorbed liquidity over the past few weeks after overnight borrowing rates tumbled, making it a bit cheaper for banks to fund long dollar positions, which in turn put pressure on the shilling. Traders forecast the shilling would trade in a narrow band of 86.40 to 86.80 range in coming days. On the Nairobi Securities Exchange, the main NSE-20 Share Index was down 9.32 points, or 0.2 percent, to close at 4,908.75 points.
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