Kenya’s shilling weakened for a third day on increased dollar trading as businesses prepare to settle monthly obligations.
The currency of East Africa’s biggest economy depreciated as much as 0.6 percent to 83.40 and was trading 0.3 percent weaker at 83.13 at 1:02 p.m. in Nairobi.
“The shilling weakening is due to increased interbank trade as they prepare to meet increased dollar demand by businesses for settlement of their end-month obligations,” Bernard Matimu, chief dealer at Nairobi based NIC Bank Ltd. (NICB), said in a phone interview today.
The central bank left its key lending rate at a record high of 18 percent for a third month after increasing it six times last year to keep the inflation rate under check and support the shilling. The Kenyan currency has gained 28 percent since reaching a record low in October, the best performer among more than 170 currencies tracked by Bloomberg.
Kenya’s 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 Feb. 29.
Tanzania’s shilling fell for a second time, the longest losing streak this month, depreciating as much as 0.4 percent to 1,598.75 per dollar and last trading 0.2 percent lower at 1,595.5 per dollar.
The Ugandan shilling also weakened for a second day, depreciating as much as 0.4 percent to 2,495 per dollar and was trading 0.1 percent weaker at 2,488. A close at that level will be the lowest since March 6, according to data provided by Bloomberg.
-- Editors: Peter Branton, Alex Nicholson
To contact the reporter on this story: Johnstone Ole Turana in Nairobi at firstname.lastname@example.org
To contact the editor responsible for this story: Antony Sguazzin at email@example.com