Kenya’s shilling retreated to a four- month low on increased demand for dollars from importers to settle month-end obligations.
The currency of East Africa’s biggest economy depreciated 0.6 percent to 85.95 per dollar, the weakest intraday price since Jan. 25, by 4:11 p.m. in the capital Nairobi, according to data compiled by Bloomberg.
“The Kenyan shilling weakness is due to end-month importer demand, falling government bond yields and a global rush to safety into dollar is expected to continue mounting pressure on the local currency,” Nairobi-based NIC Bank Ltd. (NICB), said in a note to clients.
Kenya’s three-month and six-month yields fell for the 19th straight week at an auction last week, after the government halved its borrowing target. 182-day bills borrowing costs slid to 10.915 percent from 20.914 percent realized on Jan 23, while yields on 91-day treasury bills declined to 9.865 percent from 20.799 percent tagged on similar-maturity debt sold on Jan 12
Kenya has lowered its local borrowing target to 62.1 billion shillings ($723 million) from 119.5 billion shillings for the fiscal year ending June 30, replacing shilling- denominated financing with a $600 million syndicated loan arranged by Citigroup Inc., South Africa’s Standard Bank Group Ltd. and London-based Standard Chartered Plc.
The central bank accepted today 8 billion shillings of bids of 9.225 billion shillings for seven-day repurchase agreements on offer at 17.952 percent, after offering 8 billion shillings, an official who declined to be identified in line with policy, said in a phone interview. The bank accepted 1.5 billion shillings of late six-day repurchase agreement at 16.952 percent, the official said.
Ugandan shilling appreciated 0.4 percent to 2,470.62 per dollar while Tanzania’s shilling remained unchanged at 1,590 to the dollar.
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