Kenya’s shilling dropped to a four-month low as demand for dollars to settle month-end obligations outweighed the central bank’s efforts to support the currency by curbing money supply.
The currency of East Africa’s biggest economy depreciated as much as 0.4 percent to 85.70 per dollar and was trading 0.1 percent weaker at 85.50 by 2:31 p.m., the lowest since Jan 26, according to data compiled by Bloomberg. The currency has weakened for three days.
“The shilling weakening streak is largely on account of end-month obligations from businesses,” Jeremiah Kendagor, head of trading at Nairobi-based Kenya Commercial Bank Ltd., said in a phone interview.
Kenya accepted all 8.05 billion shillings ($50.3 million) of bids it received for repurchase agreements at a weighted average rate of 17.73 percent, said a central bank official, who declined to be named in line with policy. The bank had offered 9 billion shillings of the seven-day securities, the official said.
Tanzania’s shilling gained 0.3 percent to 1,585 to the dollar and the Ugandan shilling appreciated 0.2 percent to 2,476.05 per dollar.