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Kenya’s Shilling Weakens on Higher Dollar Demand From Importers

June 28 (Bloomberg) -- Kenya’s shilling weakened for a third time this week as dollar demand by importers to meet month-end obligations outweighed efforts by the central bank to curb money supply.

The currency of East Africa’s largest economy depreciated as much as 0.6 percent to 84.55 per dollar and was trading 0.4 percent lower to 84.35 by 2:53 p.m., in Nairobi, the capital.

“The shilling is expected to remain under pressure as importers buy dollars to meet their end-month obligations,” Nairobi-based NIC Bank Ltd., said in a note to clients.

Kenya accepted 3.45 billion shillings ($41 million) of bids for repurchase agreements maturing in seven days at a weighted average rate of 17.638 percent, said a central bank official, who asked not to be identified in line with policy.

The bank also accepted 1.55 billion shillings of bids for 28-day term auction deposits at a rate of 17.768 percent, the official said. The bank, which had offered 5 billion shillings in total, received bids 13.3 of billion shillings for both sales.

Tanzania’s shilling gained 0.3 percent to 1,576 per dollar, while Uganda’s shilling remained unchanged at 2,470 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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