Kenya Shilling Rallies as Central Bank Steps Up Repurchases

Kenya’s shilling strengthened as the central bank stepped up the amount of money it removed from the market through repurchase agreements.

The currency of East Africa’s largest economy appreciated 0.4 percent to 83.70 per dollar as of 4:23 p.m. in Nairobi, the capital, gaining for a second day this week.

The Central Bank of Kenya sold 8.7 billion shillings ($104 million) of seven-day repurchase agreements at a weighted average yield of 8.623 percent, a central bank official, who asked not to be named in line with policy, said today. The bank sold 3.3 billion shillings in repos yesterday and 3 billion shillings on Aug. 13.

“The shilling has gained as we see central bank increasing the amount its curbing from the market,” Jeremiah Kendagor, head of trading at Nairobi-based Kenya Commercial Bank Ltd., said in a phone interview today.

The central bank also sold 1 billion shillings of 14-day term-auction deposits at 9 percent, the official said.

The Tanzanian shilling weakened 0.1 percent to 1,579 to the dollar, while Uganda’s shilling was little changed at 2,480.50 versus the U.S. currency.