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 Africaâ€™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.
â€œThe 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,â€ 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 Kenyaâ€™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.