Kenya’s shilling climbed the most this month as the central bank curbed money supply and improved foreign exchange reserves.
The currency of East Africa’s largest economy appreciated as much as 0.5 percent, the biggest gain since July 30, to 83.65 a dollar and was trading 0.4 percent up at 83.80 per dollar by 4:38 p.m., the highest level since that date, according to data compiled by Bloomberg.
“The shilling has gained, helped by the central bank’s tight monetary policy stance and supported by rising foreign exchange reserves which have grown to above the statutory four months of import cover, giving CBK muscle to intervene in markets when necessary,” Nairobi-based NIC Bank Ltd. said today in a note to clients.
Kenya’s foreign-exchange reserves rose to $4.98 billion in the week to Aug. 2 from $4.93 billion a week earlier, the Central Bank of Kenya said in its weekly bulletin, e-mailed yesterday.
Kenya’s shilling is trading within the government’s preferred range, Finance Minister Robinson Githae told reporters today in Nairobi.
The central bank accepted 1 billion shillings ($11.9 million) of seven-day repurchase agreements at a weighted average yield of 10.15 percent, an official, who asked not to be identified in line with policy, said today. The bank did not accept any bids for the term-auction deposits, the official said from Nairobi.
The Tanzanian shilling weakened less than 0.1 percent to 1,573 to the dollar, while Uganda’s shilling gained 0.2 percent to 2,482.50 versus the U.S. currency.