Shilling slightly firmer against the dollar, Safaricom lifts stocks

The shilling was slightly firmer against the dollar on Friday, supported by tight local currency liquidity, while stocks rose for the second straight day.

At the market close, commercial banks quoted the shilling at 101.00/20 to the dollar, from Thursday’s close of 101.10/30. “It’s still the liquidity story.

The market is still quite tight and the overnight trades are quite high,” said a senior trader at one commercial bank, adding the currency is likely to remain stable heading into this week.

In a sign of further tightening of liquidity, the weighted average interbank lending rate rose to 22.1811 per cent on Thursday from 21.2682 per cent a day earlier.

This makes holding dollars expensive, which in turn helps support the shilling. “We are still watching how liquidity plays out,” a second senior trader at another commercial bank said.

The shilling has been under pressure most of this year, after imports surged and militant attacks caused tourism to dwindle, curtailing foreign exchange earnings.

On the Nairobi Securities Exchange, the main NSE-20 Share Index was up 64.39 points to 4,415.09 points.

Safaricom, the biggest stock on the bourse by market capitalisation, advanced by Sh0.65 to close at Sh14.55 per share, helping the market higher.