Kenya’s shilling weakened the most in two weeks as businesses sought dollars for their month-end obligations and on continued concern over a challenge to the presidential election result.
The currency of East Africa’s biggest economy retreated as much as 0.4 percent, the most since March 6, to 85.80 per dollar and traded 0.2 percent down at 85.60 by 1:10 p.m. in the capital, Nairobi.
Outgoing Prime Minister Raila Odinga, whose dispute of the 2007 election triggered ethnic clashes that left more than 1,100 people dead, filed a petition on March 16, challenging the victory of Uhuru Kenyatta in the March 4 ballot. The nation’s highest court, which has 14 days to rule, held its first seating today and scheduled a pre-trial conference on March 25, Chief Justice Willy Mutunga told reporters.
“The shilling has weakened on growing demand for dollars as businesses prepare to settle their end month bills,” Jeremiah Kendagor, head of trading at Nairobi-based Kenya Commercial Bank Ltd., said in a phone interview. “The ongoing presidential petition brings uncertainty in the market.”
The shilling rose 0.9 percent from the March 4 vote to March 13, when demand for dollars picked up after business resumed.
The Central Bank of Kenya offered 12 billion shillings ($140 million) in seven-day repurchase agreements, an official who asked not to be identified in line with policy said by phone today. The bank uses the repos to reduce money supply and support the shilling.
Uganda’s currency weakened 0.5 percent to 2,639.50 per dollar, while the Tanzanian shilling weakened 0.8 percent to 1,637.70 per dollar.
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