NAIROBI: The Kenyan shilling was lost ground against the dollar on Tuesday, hurt by a drastic fall in interbank lending rates which have lead to looser liquidity in the market. Stocks were up slightly.
At 1330 GMT, commercial banks posted the shilling at 102.40/50, a touch weaker than Monday's closing rate of 102.35/45.
"Low interbank rates have increased liquidity and make it easier to short the local currency," said a trader at a commercial bank. The weighted average interbank yield fell to 4.96 percent on Monday from 7.5 percent at the start of the year and 13.3 percent at the end of October.
Traders say the prospect of further central bank interventions was supporting the local currency. The bank has sold dollars in the past few months when the shilling has weakened past the 102.50 level.
On the Nairobi Securities Exchange, the main NSE-20 Share Index was up 10.49 points, or 0.3 percent, to close at 3,835.10 points.
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