Kenya Shilling Gains Most in 7 Months as Repos Remove Money
Kenya’s shilling appreciated the most in almost seven months as the central bank removed the highest amount of the currency from the market this year and investors paid for treasury bonds.
The currency of East Africa’s biggest economy advanced as much as 0.6 percent to 86.95 per dollar, the biggest gain on a closing basis since July 30. The currency traded 0.3 percent stronger at 87.15 by 4:41 p.m. in Nairobi.
The Central Bank of Kenya accepted 16 billion shillings ($184 million) of bids for nine-day repurchase agreements today, according to a central bank official, who asked not to be identified in line with policy. It sold the nine-day repos rather than the usual seven-day securities due to elections being held on March 4, the official said. The bank uses the repos to reduce money supply and support the shilling.
“The shilling has received support from the removal of more money from the market by the central bank and investors settling their successful bids of treasury bonds,” Duncan Kinuthia, head of trading at Commercial Bank of Africa Ltd. “There is an increase of dollar inflows from non-governmental organizations for their end-of-the-month bills”.
Investors paid today for the 25.5 billion shillings of two- year and 15-year treasury bonds sold at an auction on Feb. 20, according to the bank website.
Kenya will hold its presidential vote next week, the first since a disputed 2007 ballot sparked two months of violence in which more than 1,100 people died.
Uganda’s currency climbed for a second day, rising 0.9 percent to 2,647, the biggest gain since Dec 24, according to data compiled by Bloomberg. The Tanzanian shilling rallied 0.6 percent to 1,627 per dollar.
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