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Kenya Shilling Strengthens First Day in Three on Dollar Inflows

Jan. 16 (Bloomberg) -- Kenya’s shilling strengthened for the first time in three days on increased dollar inflows from non-governmental organisations.

The currency of East Africa’s biggest economy appreciated as much as 0.2 percent to 87.16 per dollar and was trading 0.1 percent stronger at 87.30 at 12:13 p.m. in Nairobi.

“The shilling has gained due to increased dollar inflows from non-governmental organisations,” John Muli, a trader at Nairobi-based African Banking Corp., said in a phone interview.

The Central Bank of Kenya offered 4.5 billion shillings ($51.5 million) in repurchase agreements, a central bank official who could not be named in line with the bank policy said in a phone interview today.

Tanzania’s shilling weakened for a second day, depreciating 0.2 percent to 1,583 at 12:06 p.m. in Dar es Salaam, the commercial capital.

Uganda’s currency weakened first day in seven days, as dollar demand increased following an end to a four-day strike by businesses.

The Uganda shilling weakened 1.6 percent to 2,442.90 per dollar and was trading 0.5 percent lower at 2,421.25 at 12:02 p.m. in Kampala, the capital.

“The weakening of the shilling is due to increased dollar demand as traders are now in the market seeking the dollar,” Timothy Muzoora, the head of currency trading at Cairo International Bank Ltd. said today by phone from Kampala. “Going forward, the shilling may weaken further as there is an appetite for the dollar in the market.”

Business owners had called the strike over increased commercial-bank interest on loans.

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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