Kenyan Shilling Gains for 2nd Day to Dollar, Takes Weekly Advance to 0.5%
Kenya’s shilling strengthened for a second day versus the dollar, taking its advance this week to 0.5 percent.
The currency of East Africa’s biggest economy traded 0.2 percent stronger at 80.38 per dollar at 4:06 p.m. in Nairobi from a close of 80.55 yesterday.
“The market is quiet and is expected to remain choppy due to low liquidity, as businesses slow down due to the festive season,” Bethuel Karanja, head of trading at Nairobi-based CFC Stanbic Bank Ltd., said in a telephone interview today.
Kenya’s economy will probably expand by 5.3 percent next year and growth may reach 6 percent if there aren’t any “shocks”, World Bank country director Johannes Zutt said yesterday. That’s higher than the 5 percent forecast announced on June 3.
Frontier-market stocks rose after the European Central Bank said policy makers will continue offering banks unlimited loans through the first quarter to stem the spread of the region’s sovereign debt crisis.
Pending sales of U.S. existing houses jumped by a record 10 percent in October, compared with a median estimate by 40 economists surveyed by Bloomberg for a 1 percent drop, raising speculation a recovery in the world’s biggest economy will drive demand for developing nations’ exports. Separate reports showed claims for jobless benefits over the past month on average dropped to a two-year low, and that November chain-store sales exceeded estimates.
“The World Bank’s higher growth expectation is not expected to have an immediate bearing on shilling performance but in the medium to long term, the higher growth projection will boost the shilling,” Karanja said. “The U.S.’s economic performance will in the medium term lead to more remittances which will strengthen the shilling.”
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