Bloomberg News

Kenya Shilling Strengthens Most in Week on Increased Tea Demand

March 27, 2012

Kenya’s shilling strengthened the most in more than a week on anticipation of increased tea sales at an auction today, leading to a higher inflow of dollars.

The currency of East Africa’s biggest economy appreciated as much as 0.5 percent, the most since March 19, to 82.80 per dollar and was trading 0.2 percent stronger at 83.06 at 11:22 a.m. in Nairobi.

“The shilling has gained on anticipation of increased dollar inflows from today’s tea auction,” Duncan Kinuthia, a dealer at Nairobi-based Commercial Bank of Africa Ltd., said in a telephone interview today. Kenya, the world’s biggest exporter of black tea, holds its weekly auction on Tuesdays’ in the port city of Mombasa.

Tea production for January rose to 36.2 million kilograms (79.8 million pounds) from 35.9 million kilograms a year earlier, Sicily Kariuki, managing director of the Kenya Tea Board, said in an e-mailed response to questions on March 9. Tea exports climbed 13 percent to 37.9 million kilograms from 33.6 million kilograms a year earlier, Kariuki said.

Tea is Kenya’s biggest source of foreign-exchange income. Last year it earned 109 billion shillings ($1.3 billion) after producing 377.9 million kilograms of the crop. Agriculture accounts for 21 percent of Kenya’s economic output.

Tanzania’s shilling strengthened for the first time in three days, gaining as much as 0.3 percent to 1,589.50 before trading 0.1 percent stronger at 1,593 to the dollar.

The Ugandan shilling snapped a four-day losing streak, last trading 0.1 percent higher at 2,507.5 to the dollar.

-- Editors: Peter Branton, Ash Kumar

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


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus