NAIROBI: Kenya's shilling sunk to a three-and-a-half year low on Monday as importers bought dollars, while stocks finished lower as foreign investors stayed out due to the weakening currency.
At the close of trade, commercial banks quoted the shilling at 97.85/95 to the dollar - a level last touched in Nov. 2011 - down from Friday's close of 97.40/50.
"There's still some bit of dollar-buying," Martin Runo, senior trader at Chase Bank, said.
The shilling has been under pressure this year mainly due to a firmer dollar, a gaping current account deficit and a slump in tourism caused by frequent Islamist militant attacks that have scared off tourists and curbed hard currency inflows.
On the stock exchange, the benchmark NSE-20 share index fell 0.4 percent to close at 4,858.61 points.
"It is a bear market," said Aly Khan Satchu, an independent trader and analyst, adding foreign investors had turned cautious due to the currency risk caused by the shilling's weakening.
In the secondary debt market, bonds worth 2.3 billion shillings ($24 million) were traded, up from 114.4 million shillings on Friday.
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