July 23 (Bloomberg) -- Kenya’s shilling fell for a second day against the dollar, heading for its weakest level in more than three weeks as month-end demand starts building up and concern increased of a renewed crisis in the euro area.
The currency of East Africa’s biggest economy dropped 0.2 percent to 84.32 a dollar by 12:24 p.m. in Nairobi, the capital. A close at that level would be the lowest since June 28, according to data compiled by Bloomberg.
“The market sentiment is turning toward a weaker shilling partly due to end-month demand and also because there are fears about the news coming out of the Eurozone so people in emerging markets like Kenya start exiting the market because of risk aversion,” Duncan Kinuthia, head of trading at Commercial Bank of Africa Ltd., said in a phone interview today.
A surge in Spanish bond yields dimmed the outlook for a bill sale tomorrow before Greece’s creditors meet this week amid doubts the country will meet bailout commitments. The International Monetary Fund will stop paying further rescue aid to Greece, making the country’s insolvency in September more likely, Der Spiegel magazine said yesterday, citing unidentified European Union officials.
“The shilling is expected to be under pressure this week as month-end dollar demand especially from the oil and energy sector is expected,” Nairobi-based NIC Bank Ltd. said today in an e-mailed note.
Uganda’s currency weakened 0.2 percent to 2,468.95 per dollar dollar, while Tanzania’s currency depreciated 0.4 percent to 1,589.50, according to data compiled by Bloomberg.
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