Kenya’s Shilling Weakens First Time in 3 Days on Dollar Demand
Kenya’s shilling weakened for the first time in three days on increased demand for dollars.
The currency of East Africa’s biggest economy depreciated as much as 0.6 percent to 83.38 per dollar and traded 0.2 percent lower at 83.15 as of 2:04 p.m. in Nairobi, the capital.
“The shilling has weakened due to increased dollar demand from businesses trying to accumulate at the existing levels which are comparative high,” Jeremiah Kendagor, acting head of trading at Nairobi-based Kenya Commercial Bank Ltd., said in a phone interview.
Policy makers boosted the key rate by 12 percentage points last year to rescue the shilling and combat inflation, which reached 19.7 percent in November. Since then, inflation has slowed to 18.3 percent in January as the impact of the worst drought in 60 years waned and the shilling surged 27 percent against the dollar from a low of 106.75 on Oct. 11.
Tanzania’s shilling rose as much as 0.9 percent and traded 0.5 percent stronger at 1,590 per dollar as of 2:04 p.m.
“The appreciation is due to support from the central bank, which is selling dollars to meet the demand coming in from oil companies,” Hakim Sheik, a dealer with Commercial Bank of Africa Tanzania Ltd., said today by phone from Dar es Salaam, the commercial capital.
The Ugandan shilling depreciated as much as 0.4 percent and traded 0.2 percent weaker at 2,314 per dollar as of 2:14 p.m.
“The shilling has weakened due to growing dollar demand,” Abbey Mutabali, currency trader at Centenary Bank Ltd., said by phone from Kampala.
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