Bloomberg News

Kenyan Shilling Drops as Central Bank Settles Matured Securities

July 20, 2012

Kenya’s shilling weakened for the first time this week, heading for the biggest decline in more than a month as the central bank settled matured securities while refraining from selling new repurchase agreements.

The currency of East Africa’s largest economy depreciated by as much as 0.6 percent to 84.26 per dollar and was trading 0.5 percent weaker at 84.18 by 12:43 p.m. in Nairobi, the capital. A close at that level would mark the largest retreat since June 12, according to data compiled by Bloomberg.

“The Kenyan shilling is under pressure today from maturing repurchase agreements of 6 billion shillings ($71.3 million) which has boosted money supply,” Nairobi-based NIC Bank Ltd. (NICB), said in a note to clients today.

The Central Bank of Kenya stayed out of the money market for a second day today, according to a bank official, who asked not to be identified in line with policy. The bank has been offering repurchase agreements or term-auction deposits to curb money supply since June 27 through July 18.

Businesses are due to pay value added tax, excise duty, withholding tax, aviation fees and standards levy today, according to the Kenya Revenue Authority website.

Uganda’s shilling weakened 0.2 percent to 2,470 per dollar, while the Tanzanian shilling depreciated 0.2 percent to 1,585 per dollar.

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