Bloomberg News

Kenya’s Shilling Gains as Central Bank Reduces Money Supply

April 27, 2012

Kenya’s shilling strengthened against the dollar as the central bank reduced money supply in the market.

The currency of East Africa’s biggest economy gained for a third day, climbing less than 0.1 percent to 83.14 per dollar by 4:08 p.m. in the capital, Nairobi, heading for its strongest in a week, according to data compiled by Bloomberg. The currency had earlier declined as much as 0.2 percent.

Kenya’s central bank received bids of 11.3 billion shillings ($135.9 million) after offering 5 billion shillings of seven-day repurchase agreements. It accepted 5 billion shillings at a weighted average rate of 14.49 percent.

The repo auction helped manage liquidity in the market, and support the shilling, Nahashon Mungai, a currency trader with Equity Bank Ltd., said by phone from Nairobi, the capital.

“The fact the central bank had more than twice the bids show the market is awash with liquidity,” he said. “The repo has helped support the shilling and stem its losses.”

Uganda’s shilling climbed 0.4 percent to 2,505 per dollar, heading for its biggest gain in two weeks, while Tanzania’s rose for the first time in four days, adding 0.3 percent to 1585.50.

To contact the reporter on this story: Sarah McGregor in Nairobi at smcgregor5@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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