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UPDATE 2-Kenya shilling closes steady vs dollar, stocks down
April 5, 2012 / 4:07 PM / 6 years ago

UPDATE 2-Kenya shilling closes steady vs dollar, stocks down

* Central bank mops up $115 million via repos
    * Shilling seen supported by high market rates
    * Equity Bank shares drag down bourse

 (Adds markets close, stocks)	
    By Kevin Mwanza	
    NAIROBI, April 5 (Reuters) - The Kenyan shilling closed flat
against the dollar on Thursday, holding at highs reached on
Wednesday when the central bank kept its key rate at 18 percent,
signalling policy would remain tight, and after it stepped in to
soak up liquidity.	
     The bank held its benchmark rate for a fourth
consecutive month, reflecting concerns about inflation and
private sector credit growth, and mopped up 9.6 billion
shillings ($115.3 mln) at a weighted average rate of 15.8
percent through repurchase agreements. 	
    In its policy statement on Wednesday, the bank pledged to
intervene in the markets to reduce volatility in the interbank
rate.     	
    The rate dropped to 12.7 percent on Wednesday, from 18.8
percent a day earlier and traders attributed the fall to
increased liquidity after the central government released cash
to make payments for recurrent expenditure. 	
    At the 1300 GMT market close, commercial banks quoted the
shilling at 83.05/25 per dollar, barely changed from
Wednesday's close of 83.00/20.	
    "We saw the interbank rate drop drastically after liquidity
improved and the central bank is just seeking to reverse that.
There will not be much effect on the shilling," said Philip
Wambua, head of foreign exchange and treasury at Bank of Africa.	
    The central bank, which has stayed out of the repo market
since Feb. 10, has mopped up 49.9 billion shillings in repos
this year.	
    Kenyan markets will close for the Easter holidays on Friday
and Monday.	
    Traders expected offshore investor demand for high-yielding
government securities to support the shilling when the markets
re-open. 	
    The shilling has gained 2.1 percent this year, extending a
recovery from an all-time low of 107 shillings per dollar hit in
October. That fall prompted the central bank to push up rates to
keep foreign investors in the currency. 	
    At the Nairobi Securities Exchange, the benchmark NSE-20
Share Index edged down 0.2 percent to 3,400.48 points,
dragged down by Equity Bank on ex-dividend sales.	
    "Equity Bank pushed the market down. We saw huge sell orders
on the counter, which we believe is continued selling by
investors after it went ex-div," said Ronald Lugalia, an analyst
at Afrika Investment Bank.	
    Equity Bank, Kenya's biggest bank in terms of account
holders, fell 0.3 percent to 19.40 shillings on large volume.	
    In the debt market, government and corporate bonds worth 1.3
billion shillings ($15.6 mln) were traded, down from 1.7 billion
on Wednesday.	
               ...........................Shilling spot rates
                  .....................Shilling forward rates
                           .......................Cross rates
         ..................................Local contributors
           .......................Central Bank of Kenya Index
          .....................Kenyan Bonds contributor pages
                          ...............Treasury bill yields
        ..................Central bank open market operations
        .........................Horizontal repo transactions
         ,       ................Daily interbank lending rate
              .............................Kenya Bond pricing
             ..................Real time Africa economic data
 <ECI & AFR> ...........................African economic news
          .................................NSE-20 Share Index
         .................................NSE All Share Index
             ...........................FT NSE Kenya 15 Index
             .......................... FT NSE Kenya 25 Index
  SPEED GUIDES:
                                                
 ($1 = 83.2500 Kenyan shillings)	
	
 (Editing by Richard Lough and Tim Pearce)

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