Kenya’s shilling strengthened for the first time in four days as the country’s central bank extended its policy of tighter money supply.
The currency of East Africa’s biggest economy appreciated as much as 0.5 percent and traded 0.4 percent stronger at 85.10 by 1:29 p.m, according to data compiled by Bloomberg.
Kenya’s central bank accepted 3.4 billion shillings in bids for term auction deposits at 18 percent, an official, who declined to be named in line with policy, said by phone from Nairobi, the capital. The bank has mopped up a total of 20.6 billion shillings from June 6, when it started selling TADs, according to data compiled by Bloomberg.
The central bank introduced “longer tenor term auction deposits as an additional instrument for liquidity management,” it said in its monetary policy committee statement June 5.
Term-auction deposits in Kenya are different from repurchase agreements as their maturity is longer -- 14, 21 and 28 days -- and are paid back with interest rather than being sold at a discounted yield, according to a research note e- mailed yesterday from Nairobi-based Sterling Capital Ltd.
The central bank accepted 100 million shillings of bids at its auction for seven-day repurchase agreements, carrying a weighted average yield of 17.5 percent, the central bank official said.
Tanzania’s shilling strengthened 0.1 percent to 1,585 per dollar, while the Ugandan shilling weakened 0.2 percent to 2,490 per dollar.
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