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Kenya Shilling Gains Second Day as Central Bank Removes Money

Kenya’s shilling gained for a second day, reaching the highest this month, as the central bank removed more money from the market than it had offered for sale.

The currency of East Africa’s biggest economy gained 0.2 percent to close at 87.20 per dollar, the highest since Jan. 31, according to data compiled by Bloomberg. It earlier traded 0.7 percent higher at 86.80 per dollar in Nairobi, the capital.

The Central Bank of Kenya accepted 3.75 billion shillings ($43 million) in bids for seven-day repurchase agreements, having offered 2.5 billion shillings, according to an official, who asked not to be identified in line with policy.

“The shilling firmed against the dollar as a result of central bank squeezing liquidity in the market,” Nairobi-based NIC Bank Ltd. said in a note to clients.

The bank, which uses the repos to reduce money supply and support the shilling, has absorbed 118 billion shillings from the market this year, according to data compiled by Bloomberg.

Uganda’s currency weakened less than 0.1 percent to 2,645 per dollar, while the Tanzanian shilling weakened 0.1 percent to 1,617 per dollar.

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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