Bloomberg News

Kenya’s Shilling Gains for Seventh Day as Central Bank Meets

February 01, 2012

Feb. 1 (Bloomberg) -- Kenya’s shilling strengthened for a seventh day, the longest winning streak in 18 months, as the country’s central bank monetary policy committee is expected to hold the interest rate at a meeting today and inflation dropped.

The currency of East Africa’s biggest economy appreciated as much as 0.7 percent and was trading 0.3 percent stronger at 83.60 per dollar at 1:55 p.m. in the capital Nairobi. This is the longest series of gains since Aug. 3, 2010.

“The shilling is gaining following the drop in inflation and on expectation that the monetary policy committee will retain the rates at current levels,” Duncan Kinuthia, a dealer at Nairobi-based Commercial Bank of Africa Ltd., said in a phone interview.

Kenya’s inflation rate fell for a second month to 18.3 percent in January from 18.9 percent in December, the Nairobi- based Kenya National Bureau of Statistics said yesterday in an e-mailed statement.

The central bank will probably keep its benchmark lending rate unchanged at 18 percent for a second month, according to all five economists surveyed by Bloomberg. The bank, based in the capital, Nairobi, will announce its decision in an e-mailed statement today.

Tanzania’s shilling strengthened for the first time in four days, on increased dollar inflows from the agricultural industry and low dollar demand. The currency of the second-biggest economy in East Africa appreciated as much as 0.8 percent and was trading 0.2 percent stronger at 1,596 at 1:43 p.m.

“We have had inflows from corporate and public sector clients seeking shillings to meet month-end obligations,,” Alex Ngurusu, head treasurer of CRDB Bank Plc, said by phone today from Dar es Salaam, the commercial capital.

Uganda’s shilling depreciated, snapping a three day rally. The currency weakened as much as 1 percent and traded 0.7 percent lower at 2,335 per dollar.

--With assistance from David Malingha Doya in Dar es Salaam. 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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