June 14 (Bloomberg) -- Kenya’s shilling strengthened the first day in three against the dollar as the central bank sold repurchase agreements to curb money supply.
The currency of East Africa’s biggest economy appreciated as much as 0.6 percent to 89.38 per dollar and was trading 0.5 percent stronger at 89.45 by 2:14 p.m. in the capital, Nairobi, from yesterday’s close of 89.88.
Kenya’s central bank sold 500 million shillings ($6 million) of repurchase agreements at 5.75 percent today, an official who declined to be identified in line with the Nairobi- based bank’s policy said today.
“The correction of the local unit is due to the mop-up by the central bank,” Mwambu Malamba, a senior dealer at Nairobi- based Commercial Bank of Africa Ltd., said in a phone interview today.
The shilling has weakened 9.8 percent against the dollar this year, making it the fourth-worst performer worldwide after Suriname’s dollar, Maldives’ rufiyaa and the Iranian rial, according to Bloomberg data. The currency reached the weakest level in 17 years against the dollar yesterday.
In a repurchase agreement an investor agrees to sell a security to another trader, while at the same time arranging to buy it back at a future date and at a pre-determined price.
--Editors: Ana Monteiro, Alex Nicholson
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