Kenya Shilling Weakens on Dollar Demand Before Festive Season
Kenya’s shilling weakened, snapping two days of gains, as businesses sought to buy more dollars ahead of the festive season.
The currency of East Africa’s biggest economy declined as much as 0.4 percent to 85.98 a dollar and was trading 0.3 percent weaker at 85.93 a dollar as of 12:27 p.m. in Nairobi, the capital.
“The shilling is under pressure as businesses seek to accumulate dollars for their purchases in preparation for the festive season,” Jeremiah Kendagor, head of trading at Nairobi- based Kenya Commercial Bank Ltd., said by telephone. “We expect to see robust business in the next two weeks then a slowdown thereafter as the year comes to an end.”
Businesses usually import more products as they prepare for increased sales during the Christmas and year-end period. Christians account for 87 percent of Kenya’s 38 million population, according to the CIA World Factbook.
The Central Bank of Kenya offered 10 billion shillings ($116 million) of seven-day repurchase agreements and term- auction deposits, a bank official, who asked not to be identified in line with policy, said by phone.
The Ugandan shilling gained 0.1 percent to 2,680 a dollar, while the Tanzanian shilling depreciated less than 0.1 percent to 1,601 a dollar.
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