Jan. 2 (Bloomberg) -- Kenya’s shilling weakened for a third day, heading for a seven-month low, on increased dollar demand as businesses resumed operations in the new year.
The currency of East Africa’s biggest economy depreciated 0.2 percent to 86.30 per dollar by 12:30 p.m. in Nairobi, the capital. A close at this level would be the weakest since May 30, according to data compiled by Bloomberg.
“The shilling is coming under pressure on increased dollar demand as businesses resume operations,” Duncan Kinuthia, head of trading for Commercial Bank of Africa Ltd., said by phone from Nairobi. “There are pockets of dollar-buying interest coming into the market and with liquidity still low the shilling may slip to 86.50 a dollar.”
Remittances by Kenyans working overseas rose to $97.5 million in November from $80.8 million in the same month last year, the Central Bank of Kenya said today on its website. It increased from $91.63 million in October, it said.
Kenya is scheduled on March 4 to hold its first national elections since a disputed vote in 2007 sparked two months of ethnic clashes that left more than 1,100 people dead.
“The performance of the shilling in the first half will largely be determined by the political environment as we head into the general elections in March,” Kinuthia said.
The central bank offered 15 billion shillings ($174 million) of seven-day repurchase agreements, a bank official who asked not to be identified in line with policy, said by phone today.
The Ugandan shilling weakened 0.5 percent to 2,695 a dollar, while Tanzania’s shilling depreciated 0.6 percent to 1,594 a dollar.
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