Kenyan shilling firms vs dollar

NAIROBI: The Kenyan shilling firmed against the dollar on Tuesday, helped by aid agencies and exporters selling greenbacks in the absence of demand from importers.

Stocks dipped for a second straight session.

At the 1300 GMT market close, commercial banks quoted the shilling at 83.90/84.10 per dollar, stronger than Monday's close of 84.00/20, and showing signs of breaking out of a 84.00-84.50 range in which it has been hemmed in for over four weeks.

"We've seen some inflows from development agencies and usual exporters. There is also a slow down in demand (for dollars)," said Dickson Magecha, a trader at Standard Chartered Bank. "The support now is at 83.80, but if we break that we will be in new territory."

The shilling has gained 1.4 percent against the dollar this year, helped by the central bank keeping a tight rein on monetary policy after sharp rises in interest rates last year to prop up the currency and fight inflation.

During Tuesday's session, the bank mopped up 1 billion shillings ($11.9 million) via repurchase agreements, after receiving 5 billion shillings for the 1 billion it had offered.

Rising central bank foreign exchange reserves, which have grown to above the statutory four months of import cover, have also given the bank the muscle to intervene in markets when necessary.

In stocks, the benchmark NSE-20 Share Index dipped for a second session, down 0.4 percent to 3,815.44 points, dragged by shares in tea and coffee producer Sasini.

Sasini plunged 8 percent to 11.00 shillings a share as investors exited after it gave a full-year profit warning due to weak coffee prices and high input costs.

"Investors are wary of most agricultural firms this year after two listed tea producing firms gave a profit warning," said Ronald Lugalia, an analyst at Afrika Investment Bank.

Another tea grower, Kapchorua, gave a profit warning in June after its produce was hit by severe frost in January.

Shares in KenolKobil, Kenya's leading oil marketer by sales and a takeover target of Puma Energy, fell by 2.2 percent to 15.55 shillings.

In the debt market, government bonds worth 5 billion shillings were traded, double the 2.7 billion traded on Monday, with most of the activity centred on the 12-year infrastructure bond.