BLBG:Kenya Shilling Falls to Three-Week Low on Higher Dollar Demand
Kenya’s shilling declined against the dollar for a second trading day, sinking to its weakest level in three weeks, as importers bought the U.S. currency to pay for fuel shipments amid tight dollar supplies.
The currency of East Africa’s biggest economy retreated 2.4 percent to 87.60 per dollar by 1:56 p.m. in Nairobi, its weakest level since Dec. 14, according to data compiled by Bloomberg.
“Buyers are coming back into the market after the holidays, especially from the energy sector,” Solomon Alubala, a trader at Cooperative Bank of Kenya Ltd., said by phone from Nairobi. “As the tea auctions resume after the holidays, we should start see the selling of dollars again back in the market.”
The Central Bank of Kenya accepted 2.5 billion shillings ($28.6 million) of bids for seven-day repurchase agreements at a rate of 18 percent, after offering 5 billion shillings of the securities today, dealer Donald Murgor said.
The Ugandan shilling gained 1.3 percent against the dollar to 2,453, heading for its steepest advance in three weeks. The country’s central bank is selling today 95 billion shillings ($38.7 million) of government bonds maturing in 2015.
“Today’s bond auction attracted some dollars from offshore investors and yet people are short of the shilling locally to buy the dollar,” Abby Mutabali, a currency trader at Centenary Bank Ltd., said by phone from the capital Kampala.
To contact the reporters on this story: Sarah McGregor in Nairobi at smcgregor5@bloomberg.net; David Malingha Doya in Dar es Salaam at dmalingha@bloomberg.net
To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net
