Kenya’s shilling snapped two days of gains as businesses sought to accumulate dollars after the currency of East Africa’s biggest economy strengthened to its highest level in more than a year yesterday.
The shilling depreciated as much as 0.5 percent and traded less than 0.1 percent lower at 82.20 per dollar as of 3:02 p.m. in Nairobi, the capital.
“The shilling has weakened on account of increased dollar demand by businesses as they seek to accumulate dollars following the strengthening to new levels,” Jeremiah Kendagor, acting head of trading at Nairobi-based Kenya Commercial Bank Ltd. (KNCB), said in a phone interview.
Kenya’s currency closed yesterday at 82.18 per dollar, its highest in 13 months, on what the central bank attributed to “tight” money market.
Tanzania’s shilling strengthened 0.4 percent to 1,587.55, the biggest gain since Jan. 20.
“The shilling has been supported by the central bank sale of dollars to service demand coming from oil companies and the manufacturing sector,” Fred Siwale, a dealer with CRDB Bank Plc (CRDB) said by phone today from Dar es Salaam, the commercial capital.
Ugandan shilling depreciated for a second day, depreciating as much as 0.9 percent before paring its loss to 0.3 percent at 2,464.
“The shilling weakened because the central bank offered a one week reverse repo which eased the tight liquidity in the market,” Taib Lubega, a currency trader at Stanbic Bank Uganda Ltd. (SBU), said by phone from Kampala without specifying the amount offered. Stephen Kaboyo, director of financial markets at the central bank, did not answer his phone when Bloomberg sought a comment.
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