Kenya’s Shilling Weakens Second Day as Uganda Currency Slides
Kenya’s shilling weakened for the second day as delays in delivering a second bailout to Greece increased concern Europe’s debt crisis will worsen, damping demand for riskier, emerging-market assets.
The currency of East Africa’s biggest economy depreciated as much as 0.6 percent and traded 0.2 percent lower at 83.05 as of 7 p.m. in Nairobi, the lowest in a week on a closing basis.
A decision on 130 billion euros ($170 billion) of aid to Greece was postponed to Feb. 20. Ratings for global banks may be cut as lenders worldwide face risks of rising funding costs amid Europe’s debt woes, Moody’s Investors Service said.
“The shilling has weakened due to the ongoing euro crisis,” said Jeremiah Kendagor, acting head of trading at Nairobi-based Kenya Commercial Bank Ltd. Investors are seeking “the safety of the U.S. currency,” he said.
The Ugandan shilling depreciated for a second day, with the currency of the third-biggest economy in East Africa declining as much as 0.4 percent and traded 0.1 percent lower at 2,320 per dollar.
“The shilling has weakened due to demand for the dollar in the interbank market,” Peter Mbowa, a currency trader at the local unit of Kenya Commercial Bank Ltd., said by phone from Kampala.
Tanzania’s shilling headed to a three-week high as the central bank sold dollars. The currency of the second-biggest economy in East Africa appreciated 0.3 percent at 1,590 per dollar.
“The shilling is strengthening due to inflows coming in from the central bank and walk-in customers,” Eric Chijoriga, a trader with National Bank of Commerce Ltd., ABSA Group Ltd.’s local unit, said by phone from Dar es Salaam.
-- With assistance from David Malingha Doya in Dar es Salaam and Fred Ojambo in Kampala. Editors: Stephen Kirkland, Linda Shen
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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