NAIROBI: The Kenyan shilling and main stock market index were flat on Tuesday, shrugging off a jump in the gross domestic product of East Africa's biggest economy after the authorities changed the base calculation year.
Foreign exchange and stock market traders said both markets had factored in a rise of Kenya's GDP, now estimated to be 25 percent bigger after the base calculation year was changed to 2009 from 2001.
At close of trade at 1300 GMT, commercial banks quoted the shilling at 89.30/40 to the dollar, the same as Monday's close.
Traders said the shilling oscillated either side of that level to touch an intraday high of 89.00/20 and a low of 89.45/55 to the dollar.
The moves were driven by importer demand for dollars, which weakened the local currency, but this was countered when the central bank mopped up excess liquidity.
The central bank often soaks up excess shilling liquidity through repos or other instruments, a move that tends to support the shilling by making it more expensive to hold dollars.
The shilling has broadly weakened in recent weeks, and has closed in on 89.50 where the central bank sold dollars to offer support last week. But traders say the central bank was unlikely to step in for now as long as weakness appeared to reflect a need for dollars rather than speculation.
During the session, the central bank mopped up 8.75 billion shillings ($98.31 million) in excess liquidity. It had sought to absorb 9 billion shillings.
"We saw the CBK in to mop up some shillings in the repo. That gave it some momentary support," Nahashon Mungai, trader at Kenya Commercial Bank said.
"Regulatory intervention is what's been watched at the moment, and all this dollar demand. I suppose that's why the shilling is on the back foot."
Traders said they forecast the shilling, which has lost 3 percent to the dollar so far this year, to trade in the 89.00 to 89.60 range in coming days.
On the Nairobi Securities Exchange, the main NSE-20 Share Index was barely changed, easing by 2.19 points or 0.04 percent, to close at 5,255.62 points.
On the secondary market, government bonds valued at 4.34 billion shillings were traded, up from 1.24 billion shillings traded on Monday.
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