Kenyan Shilling Weakens on Dollar Demand, Unchanged Rate

Kenya’s shilling weakened for the second day this week on increased dollar demand and after the central bank retained its benchmark rate.

The currency of East Africa’s biggest economy weakened as much as 0.4 percent and was trading 0.2 percent lower at 82.90 to the dollar at 2:29 p.m. in Nairobi. The shilling gained 0.8 percent yesterday.

“The shilling has weakened on increased demand on account of the gain it made, with businesses seeking to accumulate dollars,” Jeremiah Kendagor, acting head of trading at Nairobi- based Kenya Commercial Bank Ltd., said in a phone interview.

The central bank left its benchmark interest rate unchanged at a record 18 percent for the third time yesterday, it said in an e-mailed statement.

The inflation rate declined for a third month to 16.69 percent in February from 18.3 percent in January, the Nairobi- based Kenya National Bureau of Statistics said in an e-mailed statement on Feb 29.

Tanzania’s shilling strengthened for the first day this month on increased dollar inflows. The currency of the second- biggest economy in East Africa was last trading 0.3 percent stronger at 1,595 per dollar.

“We have got some inflows which has supported the shilling,” Eric Chijoriga, a dealer with National Bank of Commerce Ltd., ABSA Group’s Tanzanian unit, said today by phone from Dar es Salaam, the commercial capital.

The Ugandan shilling appreciated for a second day, gaining as much as 3.8 percent and trading 0.3 percent higher at 2,492.50 per dollar by 1:17 p.m. in Kampala.

-- With assistance from David Malingha Doya in Dar es Salaam Editors: Peter Branton, Alan Purkiss

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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