Kenya Shilling Heads for 6-Month Low on Importers’ Dollar Demand
Kenya’s shilling swung between gains and losses as the central bank stepped up efforts to support the currency amid increased demand for dollars from retailers to buy imports for the festive season.
The currency of East Africa’s biggest economy traded less than 0.1 percent weaker at 86.11 per dollar by 2:13 p.m., in Nairobi, the capital, poised for the lowest since May 31. The shilling earlier appreciated as much as 0.4 percent.
The Central Bank of Kenya offered 8 billion shillings ($93 million) in today’s sale of seven-day repurchase agreements compared with 2.7 billion shillings accepted yesterday, a bank official who asked not to be identified in line with policy, said by phone. Imports in Kenya rise during the Christmas and year-end period as companies anticipate higher sales. Christians account for 87 percent of Kenya’s 38 million population, according to the CIA World Factbook.
“The Kenyan shilling slipped as importers stocked up on dollars before the holidays,” Nairobi-based NIC Bank Ltd. said in an e-mailed note to clients. “We expect the shilling to be lifted in coming days by dollar inflows from Kenyans working abroad and holidaymakers flocking to the country’s game reserves in December. The shilling has been supported by the central bank’s efforts to support it by mopping up extra supply.”
The Ugandan shilling weakened 0.1 percent to 2,657.49 a dollar, while Tanzania’s shilling gained 0.1 percent to 1,598 a dollar.
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