Kenya, Uganda shillings set to gain

NAIROBI, May 26 – Kenya’s shilling is likely to strengthen next week away from record lows against the dollar, while foreign investor interest in a debt issue in neighbouring Uganda should also help to boost the currency there.

 

KENYA

Kenya’s shilling, which hit an all time-low of 87.15 on May 18, is likely to firm against the dollar over the next week, helped by tight liquidity due to the central bank mopping up shillings through repurchase agreements.

The Central Bank of Kenya has mopped up 20.5 billion shillings through repurchase agreements since May 11 and auctioned bonds worth 18 billion shillings on Wednesday.

At 0929 GMT, the currency was at 85.50/60 against the dollar, stronger than last Thursday’s close of 86.15/25.

“The fact that they are mopping up what they sell shows that they do not want the shilling to be debased on the back of flush liquidity,” said Chris Muiga, a senior trader at Kenya Commercial Bank.

 

Source: Reuters Africa newsletter

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