BLBG:Kenya Shilling Weakens 1st Day in 5 as Businesses Seek Dollars
Kenya’s shilling retreated for the first time in five days as businesses accumulate dollars at favorable levels after last week’s presidential election.
The currency of East Africa’s biggest economy weakened as much as 0.3 percent to 85.50 per dollar and was trading less than 0.1 percent lower at 85.27 dollar by 11:22 a.m. in Nairobi, according to data compiled by Bloomberg. Since the vote on March 4 through yesterday, the shilling had gained 0.9 percent.
Uhuru Kenyatta, who is preparing for trial at the International Criminal Court, won the election with 50.07 percent of ballots cast, the electoral commission said on March 9. The swearing in is planned for March 26, unless a petition is filed at the Supreme Court. Outgoing Prime Minister Raila Odinga, whose dispute of the 2007 election triggered ethnic clashes that left more than 1,100 people dead, got 43.3 percent. Odinga has said he will challenge Kenyatta’s victory in court.
“The weakening is due to a buildup of demand for dollars due to the recent appreciation of the shilling,” Duncan Kinuthia, head of trading at Commercial Bank of Africa Ltd. “We expect it to continue swinging until the planned petition is determined and swearing in of the president-elect is done”.
The government plans to ensure “stability of the shilling to remove mayhem that may be caused by up-and-down swings,” Finance Minister Robinson Githae said on March 11. Kenya’s central bank held its benchmark interest rate at 9.5 percent yesterday as it gauges how the economy will react to Odinga’s dispute claim.
Kenya’s economy may expand 5.5 percent to 6 percent this year, as long as peaceful elections show stability for investors, according to the International Monetary Fund.
Uganda’s currency gained 0.5 percent to 2,645 per dollar, while the Tanzanian shilling weakened 0.1 percent to 1,623.50 per dollar.
To contact the reporter on this story: Johnstone Ole Turana in Nairobi at jturana@bloomberg.net
To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net
