Kenya Shilling Drops From 2-Week High as Businesses Buy Dollars

Kenya’s shilling declined, retreating from a two-week high as businesses took advantage of the currency’s gains to buy dollars.

The currency of East Africa’s largest economy depreciated as much as 0.8 percent to 84.25 a dollar and was trading 0.3 percent lower at 83.85 by 5:12 p.m. in Nairobi, the capital. The shilling reached 83.60 yesterday, the strongest since July 30.

“The shilling has weakened on increased demand from businesses trying to accumulate dollars as they take advantage of the gains made by the shilling yesterday,” John Muli, a dealer at Nairobi-based African Banking Corp., said in a phone interview today.

The Central Bank of Kenya sold 3.3 billion shillings ($39 million) of seven-day repurchase agreements at a weighted average yield of 8.651 percent, a central bank official, who asked not to be named in line with policy, said today. The bank sold 200 million shillings of 14-day term-auction deposits at 8.32 percent, the official said from Nairobi, the capital. The bank received bids of 4.9 billion shillings.

The Tanzanian shilling weakened 0.4 percent to 1,577 to the dollar, while Uganda’s shilling retreated 0.1 percent to 2,483 versus the U.S. currency.

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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