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Kenyan Shilling Drops to Six-Month Low on Year-End Dollar Demand

Nov. 27 (Bloomberg) -- Kenya’s shilling weakened against the dollar, heading for the lowest level in almost six months, as companies were said to seek the U.S. currency to settle year-end obligations.

The currency of East Africa’s largest economy fell as much as 0.2 percent to 86.07 a dollar and was trading less than 0.1 percent lower at 85.95 by 4:14 p.m. in the capital, Nairobi. A close at that level would be the weakest since June 4, according to data compiled by Bloomberg.

“We’ve seen a lot of demand in the market for dollars as we come to the end of the year; multinationals are repatriating for dividends and profits, importers are settling their bills,” Benard Matimu, chief dealer at Nairobi-based NIC Bank Ltd., said by phone.

The Central Bank of Kenya withdrew 7.93 billion shillings (92.3 million) from the financial markets through the sale of seven-day repurchase agreements and 14-day term auction deposits.

Uganda’s shilling fell for a seventh day, declining 1.3 percent to 2,695 a dollar, heading for its lowest close since October 2011. The Tanzanian shilling retreated 0.1 percent to 1,610 a dollar.

To contact the reporter on this story: Sarah McGregor in Nairobi at smcgregor5@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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