Bloomberg News

Kenya Shilling Declines Most in One Week as Companies Pay Taxes

April 19, 2012

Kenya’s shilling weakened the most in more than a week against the dollar as companies pay taxes due to the government by tomorrow.

The currency of East Africa’s largest economy depreciated as much as 0.3 percent, the most since April 11, to 83.32 per dollar and was trading at 83.25 by 4:02 p.m. in Nairobi.

“The shilling is trading in a small range due to the tight liquidity caused by tax payments that are due by April 20,” Sameer Lagadia, head of trading at Nairobi-based Diamond Trust Bank Kenya Ltd. (DTKL), said in a phone interview today.

Kenya collected 160.4 billion shillings ($1.93 billion) of revenue in the fiscal third quarter, Revenue Authority Commissioner-General John Njiraini told reporters today in the capital. Collections increased from 141.4 billion shillings in the same period a year earlier, he said.

The Ugandan shilling strengthened for the first time in three days, adding less than 0.1 percent to 2,515 per dollar.

“Customers haven’t been active because some were still settling mid-month tax obligations,” Faisal Bukenya, the head of currency trading at Barclays Bank of Uganda Ltd. said by phone from Kampala.

Tanzania’s shilling gained 0.3 percent to 1,585 against the dollar, according to data compiled by Bloomberg.

“It is the inter-bank market influencing the trend of the shilling today,” Fred Siwale, a dealer with CRDB Bank Plc said today by phone from Dar es Salaam, the commercial capital. “I have seen a number of banks demanding dollars probably to cover their shortfalls.”

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net.

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net


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