NAIROBI: Demand for dollars from importers and manufacturers weakened Kenya's shilling on Tuesday although it ended off lows for the session, while share prices also slipped.
At the market close of 1300 GMT, the shilling was at 90.10/20, compared with Monday's finish of 89.90/90. The currency touched a low of 90.15/25 before reversing some losses.
The weakness was broadly driven by corporate demand for dollars, but traders said some firms saw the shilling's lows for the day as a chance to book profits by making some dollar sales.
"We saw some corporate selling, which dropped it down to 90.10/20," a senior trader at one commercial bank said.
On Friday, the shilling had strengthened to below the 90-level after the central bank intervened by selling dollars, lifting the currency off three-year lows.
Sheikh Mehran, head of trading at I&M Bank said, the central bank could act again if it believed shilling weakness was driven by speculators rather than corporate need for dollars. "If it is a speculative move ... they will surely come in again," he said.
The central bank has said it has enough reserves to cushion the foreign exchange market against shocks.
Traders said the currency was likely to trade in a range of roughly 89.80 to 90.30 in the next few days.
On the Nairobi Securities Exchange, the main NSE-20 Share Index shed 2.63 points to close at 5,108.84 points.
On the secondary market, government bonds valued at 3.46 billion shillings were traded, compared with Monday's 3.15 billion shillings.
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