Kenyan Shilling Weakens Third Week in Four Against Dollar

Kenya’s shilling dropped for the third week out of four as companies paid taxes and the central bank sold repurchase agreements.

The currency of East Africa’s biggest economy was trading at 85.60 per dollar at 4:15 p.m. in Nairobi, unchanged from yesterday’s closing level, according to data compiled by Bloomberg. The shilling has retreated 0.3 percent this week.

“The shilling is seen range-bound in coming days as companies withdraw money from banks to pay value added taxes, which are due around the 20th day of every month, helping tighten liquidity in the market,” Nairobi-based NIC Bank Ltd. (NICB) commented today in an e-mailed note to clients.

The Central Bank of Kenya accepted all 7.06 billion shillings ($82.5 million) of bids for seven-day repurchase agreements and 14-day term auction deposits. The bank had offered 10 billion shillings of securities and accepted 560 million shillings for repurchase agreements at an average of 7.202 percent and 6.5 billion shillings for 14-day term auction deposits at an average of 7.896 percent.

The Ugandan shilling gained less than one percent to 2,612.50 a dollar. The Tanzanian currency strengthened less than 1 percent to 1,596.50 per dollar.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net.

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net