NAIROBI: The Kenyan shilling was little changed on Thursday after a slowdown in dollar demand from companies put off by tight liquidity, while stocks nudged higher.
At the 1300 GMT market close, commercial banks quoted the shilling at 88.05/88.15 to the dollar, barely changed from its closing level of 88.00/88.10 on Wednesday.
"Tight liquidity has kept position-taking at bay," said Sheikh Mehran, head of trading at I&M Bank. "Today has been a very flat day and corporate demand has fizzled out."
Traders said dollar inflows from Kenya's weekly tea auction have been scant due to over-production which has kept tea prices subdued for most of this year.
"There are some tea export inflows, but very small and they are being absorbed so having no impact on the shilling," said John Njenga, trader at Commercial Bank of Africa.
The shilling has weakened since Friday when banks started buying the greenback after signs that a domestic funding crunch was easing.
Overnight interbank borrowing rates had risen over the past two weeks, when the government delayed releasing funds to departments and local authorities.
In the stock market, the NSE-20 index gained 0.18 percent to close at 5,019.28 points.
Shares rose to their highest in six months last week, on bets that interest rates will come down and push investors into equities, although the rally has been punctuated by periods of profit taking.
Strong earnings announcements from Kenyan banks over the past week has helped push the index higher, with Diamond Trust Bank on Thursday gaining 0.8 percent to close at 246 shillings.
Earlier in the day it said half-year profit rose 17 percent year-on-year.
Shares in Standard Chartered Kenya, which posted a 23.6 percent rise in first-half pretax profit, were flat at 312 shillings.
The results were issued after the market had closed.
In the debt market, bonds worth 4.1 billion shillings ($46.6 million) were traded, a steep increase on the previous day's volume of 368 million shillings.
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