Kenya’s shilling headed for its highest level in six months as the central bank offered term-auction deposits to support the currency after a court upheld Uhuru Kenyatta’s election win.
The currency of East Africa’s biggest economy strengthened a third day, adding 0.2 percent to 84.80 per dollar by 2:57 p.m. in Nairobi, the strongest on a closing basis since Oct. 5, according to data compiled by Bloomberg.
The Central Bank of Kenya offered 11 billion shillings ($129 million) of bids for 14-day term-auction deposits today, according to an official at the institution who asked not to be identified in line with policy. It accepted all 9.4 billion shillings of bids for seven-day repurchase agreements yesterday. The bank uses the securities to reduce money supply and support the shilling.
“The shilling is appreciating on subdued dollar demand from businesses as the new month sets in,” Duncan Kinuthia, head of trading at Commercial Bank of Africa Ltd., said by phone. “The continued removal of money by the central bank is offering support to the shilling.”
Kenya’s Supreme Court on March 30 unanimously confirmed that Kenyatta won the March 4 vote. It rejected a petition from runner-up Raila Odinga, who argued that the electoral process had been marred by irregularities and fraud.
“The shilling is still riding on the goodwill of the court ruling,” John Muli, a dealer at Nairobi-based African Banking Corp., said by phone. “The gain has attracted interest from importers accumulating dollars at a favorable level leading to the swing being witnessed.”
Uganda’s currency gained 0.1 percent to 2,592 per dollar, while the Tanzanian shilling traded unchanged at 1,621 per dollar.