By Agency Reporter

Thursday, 23 Dec 2010

The Kenyan shilling eased against the dollar on Wednesday as the central bank bought euros, while shares eked out meagre gains on strong third-quarter economic growth data.

At the close of trading at 1300 GMT, on Wednesday, a Reuters’ report said commercial banks quoted the shilling at 80.50/60 against the dollar, down from a previous close of 80.45/55.

The central bank‘s purchase of five million euros was followed by dollar demand from some companies filling their dollar requirements ahead of the holidays.

”That put pressure on the currency. Because the market is thin, any small order that comes through, the resulting moves are exaggerated,” said Deputy Head of Treasury at Bank of Africa, Mr. Kennedy Butiko.

The central bank has bought millions of dollars in hard currencies this year to build its foreign exchange reserves and to supply the government with hard currencies for the payment of bills.

On the Nairobi Stock Exchange, the benchmark NSE-20 share index finished 0.1 per cent higher while the broader all-share index closed up 0.2 per cent.

Gains were slight but the market was underpinned by data showing Kenya‘s economy grew 6.1 per cent in the third quarter from a year earlier and rose 1.3 percent seasonally adjusted from the second quarter.

Source: Punch