Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Kenyan Shilling Retreats Most in Seven Weeks as Tea Prices Slump

June 11 (Bloomberg) -- Kenya’s shilling dropped the most in seven weeks against the dollar as tea prices retreated to the lowest in at least a year, cutting earnings from the East African nation’s largest foreign exchange.

The currency of the world’s biggest exporter of black tea weakened 0.2 percent, the most on a closing basis since April 22, to 87.80 per dollar by 4:42 p.m. in the capital, Nairobi. The shilling has lost 1.7 percent in 2014.

President Uhuru Kenyatta proposed a stabilization fund today to cushion the tea industry, a day after the price for African tea slipped 2.1 percent to $1.86 per kilogram (2.2 pounds) at an auction in the port city of Mombasa, the lowest since at least June last year, according to data compiled by Bloomberg. The country also relies on tourism to bring in the greenback, and arrivals have dipped amid warnings by some foreign governments to avoid travel to the Indian ocean coast.

“There’s an increase in demand for dollars and the inflows continue to deteriorate because of a nosedive in tea prices and tourist arrivals have reduced,” Bernard Omenda, head of treasury at Nairobi-based Equatorial Commercial Bank Ltd., said by phone.

Moves by the Central Bank of Kenya to take excess shillings off the market through sales of repurchase agreements didn’t stem the currency’s slide today. The institution sold 5 billion shillings ($57 million) of seven-day repos, according to its page on Bloomberg.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net

To contact the editors responsible for this story: Vernon Wessels at vwessels@bloomberg.net Emily Bowers

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.