Bloomberg News

Kenyan Shilling Strengthens as IMF Grants $143.7 Million Funding

December 13, 2011

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

The currency of East Africa’s biggest economy appreciated 0.4 percent to 89.18 per dollar as of 12:53 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 inflow from Ugandans living abroad and reduced dollar demand from businesses.

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 0.1 percent to 1,612 as businesses prepare to pay taxes and on increase dollar inflows from non-governmental organisation.

“We are receiving inflows from corporate clients who are offloading dollars to get shilling for making tax-related payments at this time of the year, and non-governmental organisations,” Hamis Mwakibete, Head Trading Commercial Bank of Africa Tanzania said by phone today from Dare es Salaam, the commercial Capital.

--With assistance from David Malingha Doya in Dar es Salaam at 011-1-44-20-73307849 or dmalingha@bloomberg.net Fred Ojambo in Kampala at +256-752-693-208 or fojambo@bloomberg.net

-- Editors: Ash Kumar, Peter Branton

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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