NAIROBI: Kenya's shilling weakened against the dollar on Thursday, prompting the central bank to pump in dollars and stabilise it, traders said, adding a row over the emergence of dual exchange rates had been resolved.

The currency of East Africa's biggest economy has been under pressure against the dollar for most of this year after earnings from the crucial tourism sector collapsed due to the coronavirus crisis.

The shilling weakened to an intra-day low of 111.50/70 at the start of trading, from Wednesday's close of 110.70/90.

It reversed that move after the central bank sold dollars to banks to reduce the volatility, traders said.

Banks have agreed with the central bank to trade only using the official exchange rate, after a research note published on Monday said two rates had emerged since the middle of this year, the traders said.

"The divergent rate is no more. Now we are working with one rate. They (the central bank) just agreed with banks that banks need to show each other the same rate, which is the official rate," said a currency trader at a commercial bank.

A second market participant, who did not wish to be named, said the central bank had assured traders they were free to make dollar offers at any rate on the official platform, as long as any weakening movement was gradual.

The emergence of dual rates had been blamed on efforts by the central bank to keep the shilling from weakening on the official rate.