Kenya Shilling Drops 2nd Day on Festive Season Dollar Demand
Kenya’s shilling weakened for a second day as businesses sought to accumulate dollars in anticipation of growing demand ahead of the festive season.
The currency of East Africa’s biggest economy declined 0.1 percent to close at 85.90 a dollar having traded as low as 0.3 percent to 86.01 in Nairobi.
“The weakening of the shilling is due to a build-up of dollar demand as businesses seek to accumulate on expectation that demand will increase in the coming days as businesses ramp up their output and imports to meet festive season spending,” John Muli, a dealer at Nairobi-based African Banking Corp., said by telephone.
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 accepted all bids of 4.95 billion shillings ($57.6 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 bank had offered 5 billion shillings for the securities.
The Ugandan shilling weakened 0.6 percent to 2,690 a dollar, while the Tanzanian shilling depreciated less than 0.1 percent to 1,602 a dollar.
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