Bloomberg News

Kenyan Shilling Gains on Higher Tea Prices, Central Bank Action

August 01, 2012

Kenya’s shilling gained for a second day this week on improved dollar inflows from tea sales and as the central bank curbed money supply.

The currency of East Africa’s largest economy appreciated 0.4 percent to 84 a dollar as of 3:46 p.m., in Nairobi, the capital.

“The Kenyan shilling has strengthened against the dollar as the central bank continues to curb liquidity and dollars inflows from tea are meeting the demand in the market,” John Muli, a trader at Nairobi-based African Banking Corp., said by phone today.

The Central Bank of Kenya accepted 2.5 billion shillings ($29 million) of seven-day repurchase agreements at a weighted average yield of 10.724 percent, an official, who asked not to be identified in line with policy, said today. African tea prices rose for a third week, reaching an average of $3.07 a kilogram (2.2 pounds) from $3 last week, Tea Brokers East Africa Ltd. said in an e-mailed report today.

The bank also accepted 1 billion shillings in 14-day term auction deposits at 10.85 percent, 550 million shillings of the 21-day tenure at 10.85 percent, and 50 million for 28 days at 10.75 percent, the official said by telephone today from Nairobi.

Uganda’s shilling weakened 0.2 percent to 2,485 versus the U.S. currency, while the Tanzanian shilling strengthened 0.3 percent to 1,580 to the 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


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