Kenya’s shilling remained at its weakest level against the dollar in six months as retailers demanded the U.S. currency to pay for imports for the festive period.
The currency of East Africa’s biggest economy depreciated less than 0.1 percent to 86.15 per dollar before paring the losses to trade unchanged at 86.10 per dollar by 10:52 a.m. in Nairobi, the capital.
Imports in Kenya rise during the Christmas and year-end period as companies anticipate higher sales. Christians account for 87 percent of Kenya’s 38 million population, according to the CIA World Factbook.
Kenya’s Nakumatt Holdings, the biggest retail chain by outlets expects to increase its festive season sales by 17 percent compared with the same period last year when sales were $150 million, Atul Shah, the managing director, said in an e-mailed statement on Dec. 12.
“There is last minute purchasing of dollars trickling in before the festive season which is weighing on the shilling,” John Muli, a dealer at Nairobi-based African Banking Corp., said by phone. “With the holidays approaching we expect demand to fizzle out and the shilling to trade within range bound levels of 86.10 to 86.20 a dollar,” he said.
The Central Bank of Kenya cut its daily auction of seven-day repurchase agreements to 2.7 billion shillings today from 7 billion shillings on Dec. 14, a bank official who asked not to be named in line with policy, said on phone.
The Ugandan shilling gained 0.4 percent to 2,665.5 a dollar, appreciating the most since Nov. 26. Tanzania’s shilling weakened less than 0.1 percent to 1,597 a dollar.