Kenya’s shilling gained, reversing earlier loses, as the central bank stepped up its removal of money from the financial system.
The currency of East Africa’s biggest economy strengthened 0.2 percent to 85.80 a dollar, reversing an earlier decline to 86.07.
“The shilling continues to receive a lot of support from the central bank action of mopping up excess money from the system,” Julius Kiriinya, a trader at Nairobi-based African Banking Corp., said in a phone interview.
The Central Bank of Kenya accepted 5.5 billion shillings ($63 million) of seven-day repurchase agreements, a bank official who asked not to be identified in line with policy, said by phone. Yesterday, the bank accepted 3.65 billion shillings. The repos are sold by the regulator to withdraw money supply from banks and support the shilling.
The currency declined earlier after the World Bank said it expects the central bank to cut its benchmark interest rate to support growth. Kenya has “room to stimulate growth through loosening monetary policy more,” the Washington-based lender said in a report yesterday.
The Ugandan shilling weakened 0.1 percent to 2,695 a dollar, while the Tanzanian shilling traded unchanged at 1,602 a dollar.