Kenya Shilling Strengthens Second Day on Reduced Dollar Demand
Kenya’s shilling gained for a second day on reduced dollar demand by businesses and as the central bank continued to remove money from the market.
The currency of East Africa’s biggest economy gained as much as 0.9 percent to 86.80 per dollar and was trading less than 0.1 percent stronger at 87.55 per dollar by 3:02 p.m. in Nairobi, the capital.
“There is marginal trading today with minimal demand for dollars from businesses as we go into the middle of the month, this has allowed the shilling to remain stable,” John Muli, a dealer at Nairobi-based African Banking Corp., said by phone. “The continual removal of liquidity from the market by the central bank is offering support to the shilling.”
The Central Bank of Kenya accepted 1.7 billion shillings ($19.4 million) out of 3.2 billion shillings in bids for seven- day repurchase agreements, an official, who asked not to be identified in line with policy, said by phone from Nairobi. The bank had offered 2 billion shillings. The bank uses the repos to reduce total money supply and support the shilling.
Uganda’s currency weakened less than 0.1 percent to 2,649.50 per dollar, while the Tanzanian shilling depreciated 0.1 percent to 1,617 per dollar.
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