NAIROBI: The Kenyan shilling fell to a three-year low on Wednesday as importers bought dollars, while shares slid as investors booked their gains ahead of the holidays.
At the 1300 GMT close, commercial banks posted the shilling at 90.55/65 per dollar, down from the previous day's close of 90.45/55.
Traders said importers were buying dollars to meet their obligations ahead of the holidays. Importers usually require dollars to pay for bringing petroleum products and machinery required for industrial production into the country.
"We have seen some importers front loading their requirements," said Chris Muiga, a trader at National Bank.
They said the shilling could head to the 91.00 level against the dollar if the central bank, which has supported the currency in the past through sale of dollars and liquidity management, fails to intervene.
In the stock market, the benchmark NSE-20 share index shed 0.7 percent to close at 5,135.97 points, entering a second consecutive day of profit-taking.
"We have seen a bit of a long overdue correction," said Aly Khan Satchu, an independent trader and analyst.
"We normally see a bit of profit-taking pressure as people look for funds from the stock exchange."
In the debt market, bonds worth 3.54 billion shillings were traded, up from the previous session's volume of 3 billion shillings.
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