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Kenyan shilling stable at near 3-year lows, shares rise

Kenyan shilling stable at near 3-year lows, shares riseNAIROBI: Kenya’s shilling was steady at near 3-year lows on Thursday supported by dollar inflows into the local debt market, while shares eked out slight gains.

At the 1300 GMT close of the market, commercial banks quoted the shilling at 91.95/92.05 against the dollar, barely changed from Wednesday’s close of 91.85/95.

Traders said dollar inflows from foreign investors bidding for a 25 billion shilling ($ 272.03 million) infrastructure bond to be auctioned next week, and cautious trade over the prospects of dollar sales by the central bank could keep the shilling supported and trading in a tight range in the near term.

The central bank sold an undisclosed amount of dollars on Monday when the shilling weakened sharply against the US currency. The local currency has since traded in a tight range.

But over the long term, they said the shilling could depreciate because Kenya is a net importer, soaking up dollars for imports like oil, machinery and even food.

“The demand still outweighs supply significantly and it’s not getting any better,” said Joshua Anene, a trader at Commercial Bank of Africa.

Tourism, a key source of hard currency, has been in the doldrums in recent months due to frequent attacks blamed on Islamists from neighbouring Somalia.

In the stock market, the benchmark NSE-20 share index , added 4.19 points to close at 5,346.56 points, its second straight session of gains.

Shares suffered from a bout of profit-taking after the main index hit a seven-year peak early this month but they have since started to recover.

In the debt market, bonds worth 1.1 billion shillings were traded, down from a volume of 2.5 billion shillings on Wednesday.

Copyright Reuters, 2015

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