Feb. 24 (Bloomberg) -- The shilling weakened, snapping a two-day gain as businesses sought to accumulate dollars after it fell to the cheapest level in more a year versus Kenya’s currency.
The currency of East Africa’s biggest economy weakened as much as 0.5 percent and was trading 0.3 percent lower at 82.72 at 3:10 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 enable them meet their end of month obligations. The currency of the second-biggest economy in East Africa traded 0.7 percent higher at 1,589 per dollar.
“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 remained weakened 0.5 percent to 2,347.05 to the dollar.
--With assistance from David Malingha Doya in Dar es Salaam. Editors: Stephen Kirkland, 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