NAIROBI: Kenya's shilling weakened on Wednesday to lows last seen more than three years ago while the benchmark share index posted a second straight day of slight gains.
At the 1300 GMT close of trade, commercial banks posted the shilling at 91.10/20, down from Tuesday's close of 90.90/91.00.
Traders said investors were not keen on risky assets after the dollar strengthened against other currencies.
"There is clearly pockets of demand here and there which is in line with what is happening in the global markets. It is more of a dollar story," said a trader at a commercial bank.
Others said the weakening of the shilling below the psychologically important level of 91.00 per dollar could usher in further weakness.
The shilling weakened steadily last year in part because of a downturn in tourism following a series of Islamist militant attacks. Tourists are a major source of dollars and other hard currencies for the east African nation.
In the stock market, the main NSE-20 share index added just 4 points to close at 5,102.67 points.
Shares of retailer Uchumi Supermarkets rose 0.5 percent to close at 10.30 shillings each after the government, one of its shareholders, said it would keep supporting the chain.
"The Government has resolved to remain as an anchor shareholder of Uchumi and that is why it took up its rights fully and even applied for more," Finance Minister Henry Rotich said at a ceremony to mark the start of trading of the company's rights issue concluded last month.
In the debt market, bonds worth 1.3 billion shillings were traded, up from 800 million shillings the previous day.
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