Kenya Shilling Gains on Coffee Boost as Price Jump Adds Dollars
The currency of east Africa’s biggest economy appreciated as much as 0.7 percent to 85.50 per dollar, the biggest gain since July 30 and was trading less than 0.1 percent higher at 86.05 a dollar as of 12:53 p.m. in the capital, Nairobi.
Kenya’s benchmark coffee grade climbed for a third successive sale, rising 9.9 percent to $400 for a 50-kilogram (110-pound) bag, from $364 at the previous sale two weeks ago, the Nairobi Coffee Exchange said by e-mail on Dec 11. Supplies of the grade rose 62 percent to 2,105 bags with the average price being $336.24 a bag compared with $323.97 at the previous auction, the agency said. Markets were closed yesterday for a public holiday.
“The shilling has received support from the flow of coffee sales whose proceeds are flowing into the market today as yesterday was a public holiday,” John Muli, a currency dealer at Nairobi-based African Banking Corp., said in a phone interview.
The Central Bank of Kenya used repurchase agreements to remove 17 billion shillings ($200 million) from the banking system in an a seven-day repo auction this week, a bank official who declined to be named in line with policy said on the phone. This is the highest amount offered since the bank started removing money this year to support the shilling, according to data compiled by Bloomberg.
The Ugandan shilling gained less than 0.1 percent to 2,679.50 a dollar, while Tanzania’s shilling was unchanged at 1,599 a dollar.
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