June 8 (Bloomberg) -- Kenya’s shilling rebounded from the weakest level in 17 years against the dollar as tea prices increased at a sale, boosting inflows of the U.S. currency.
The shilling appreciated as much as 0.9 percent to 86.90 per dollar and was trading 0.1 percent stronger 87.55 by 2:27 p.m. in the capital, Nairobi. Yesterday, the currency of East Africa’s biggest economy declined to 87.65, the weakest level since March 1994.
Tea prices rose for a second week to an average of $2.65 per kilogram (2.2 pounds) from $2.63 a week earlier at a weekly sale in the Kenyan port city of Mombasa, Tea Brokers East Africa Ltd. said in an e-mailed report today. The average price for Kenyan tea was $2.91 per kilogram compared with $2.20 a year earlier. Kenya is the world’s biggest exporter of black tea.
The advance in the shilling “is associated with increase inflow from the tea sales,” Jeremiah Kendagor, head of trading at Nairobi-based Kenya Commercial Bank Ltd., said by phone.
Kenya’s central bank will stay out of the currency and repurchase markets today and it will be “open for late” four- day purchase agreements at 4.75 percent, it said in a statement on its page on Bloomberg today.
Finance Minister Uhuru Kenyatta is expected to present the budget for the 2011/2012 fiscal year today in the national parliament.
--Editors: Ana Monteiro, Stephen Kirkland
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