Bloomberg News

Kenya Shilling Strengthens After IMF Approves Access to Funding

December 13, 2011

Dec. 13 (Bloomberg) -- Kenya’s shilling strengthened for the first trading session in three after the central bank said funding allocated from the International Monetary Fund will stabilize the currency.

The currency of East Africa’s biggest economy gained as much as 0.1 percent to 89.40 per dollar and was trading less than 0.1 percent higher at 89.46 per dollar at 11:27 a.m. in Nairobi.

The IMF executive board completed the second review of Kenya under the Extended Credit Facility and approved “immediate disbursement of an amount equivalent to $143.7 million,” the board announced on Dec 9. Yesterday was a public holiday.

“It’s going to support us in the policy effort that we have to stabilize the exchange rate,” central bank Governor Njuguna Ndung’u told reporters in the capital, Nairobi, today. “We believe that we will win the war against inflation.”

Uganda’s currency strengthened for the second day, reaching the highest in almost six months, on increased dollar inflows from Ugandans living abroad and reduced dollar demand by businesses preparing for the end of year.

The shilling gained 0.3 percent to 2,443 per dollar, the highest since June 20.

“The shilling has gained because of dollar inflows from Ugandans living abroad amid low demand in the market as businesses wind down their operations for the year,” Walter Mananu, a currency trader at Bank of Africa Uganda Ltd. said by phone from Kampala.

The Tanzania shilling gained for the fourth day, rising less than 0.1 percent to 1,612.

-- Editors: Peter Branton, Linda Shen

To contact the reporter on this story: Johnstone Ole Turana in Nairobi at jturana@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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