Johnstone Ole Turana
June 27 (Bloomberg) -- Kenya’s shilling weakened for a second day against the dollar as businesses bought the U.S. currency to settle month-end costs.
The currency of East Africa’s biggest economy depreciated as much as 0.4 percent to 90.80 per dollar and traded 0.1 percent down at 90.60 by 2:31 p.m. in the capital, Nairobi. The currency is 1.45 shillings stronger than a 17-year low of 92.05 per dollar reached on June 22.
“The weakening is due to increased dollar demand occasioned by businesses settling their end-of-month obligations,” Wilson Mutai, a dealer at Nairobi-based African Banking Corp., said in a phone interview today.
Kenya’s shilling has depreciated 11 percent against the dollar this year, ranking it the world’s third-worst performer after Suriname’s dollar and Maldives’ rufiyaa. The East African nation is grappling with 13 percent inflation, up from 3.2 percent in October, as the price of corn, the nation’s staple food, soared 31 percent in the period.
The bank will “consider further tightening of monetary policy to tame future inflation, and stabilize the exchange rate,” Governor Njuguna Ndung’u said on June 23.
--Editors: Ana Monteiro, Linda Shen
To contact the reporter on this story: Johnstone Ole Turana in Nairobi at firstname.lastname@example.org
To contact the editor responsible for this story: Antony Sguazzin at email@example.com