Feb. 24 (Bloomberg) -- The shilling weakened, snapping a two-day gain, as businesses bought dollars after they fell to the cheapest level in a year versus Kenya’s currency.
The currency of East Africa’s biggest economy weakened as much as 0.5 percent and was trading 0.2 percent lower at 82.60 as of 5:25 p.m. in Nairobi, the capital. The shilling closed at 82.45 yesterday, the highest since Feb. 25, 2011.
“The shilling has weakened on account of growing demand for dollars by businesses which are accumulating the currency following the recent gains,” Duncan Kinuthia, a dealer at Nairobi-based Commercial Bank of Africa Ltd., said in a phone interview today.
Tanzania’s shilling appreciated against the dollar as local businesses sold dollars to meet month-end obligations. The currency of the second-biggest economy in East Africa traded 0.7 percent higher at 1,589 per dollar at 4:38 p.m.
“The shilling has gained due to customers selling dollars to get the local currency to meet end-of month payment obligations like salaries and taxes,” Hakim Sheik, a dealer with Commercial Bank of Africa Tanzania Ltd., said by phone from the commercial capital, Dar es Salaam.
The Ugandan shilling weakened on increased dollar demand by manufacturers. The currency of the third-biggest economy in East Africa depreciated as much as 0.7 percent and traded 0.1 percent weaker at 2,337 per dollar at 4:43 p.m.
“The shilling has weakened on account of demand for the dollar by the manufacturers as they place their end month orders,” Dickson Musoni, the head of currency trading at Kenya Commercial Bank Uganda Ltd., said by phone from Kampala.
--With assistance from David Malingha Doya in Dar es Salaam and Fred Ojambo in Kampala. Editors: Peter Branton, James Kraus
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