NAIROBI: The Kenyan shilling weakened against the dollar on Friday as traders bought US currency to square positions before a long weekend, while stocks edged lower.
The shilling closed at 89.10/89.20 on Friday, weaker than Thursday's close at 88.90/89.00.
A senior trader at a Nairobi-based commercial bank said that after several days of volatile market conditions investors were squaring positions as the markets will be shut on Monday for a national holiday.
"If you look at the offshore markets ... they've had some very wild swings for the last couple of days," he said.
The shilling received some support from companies paying their monthly tax bills, further tightening money market conditions, he said.
The central bank sought to mop up 4 billion shillings ($45 million) on Friday using repurchase agreements and term auction deposits.
The bank regularly uses repo and term auction deposits to manage liquidity in the market, lending support to the shilling by making it slightly more expensive for banks to hold dollars.
On the stock market, the main NSE-20 share index inched down 10.22 points, or 0.2 percent, to close at 5,279.88 points.
Carbacid Investments Ltd., whose subsidiaries produce carbon dioxide for the beverage and brewery industries, fell 4.8 percent after it reported an 8 percent drop in profits.
"The drop in profits definitely reflected on the stock price today, that's why it went down by such a huge margin," said Agnes Achieng, a research analyst at Sterling Investment Bank.
In the debt market, bonds worth 1.4 billion shillings were traded, down from 3.1 billion shillings traded on Thursday.
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