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Kenya Shilling Weakens as Europe Flight Curb Hampers Tourism to the Nation
Kenya’s shilling weakened for a second day in three as adverse weather in Europe curbs tourism arrivals and damps demand for the currency.
The currency of East Africa’s biggest economy depreciated as much as 0.9 percent to 81.17 per dollar and traded 0.1 percent down at 80.49 per dollar at 1:29 p.m. in Nairobi, compared with a close of 80.45 yesterday.
“Inflows from the tourism sector are muted because of the flight cancellations,” Mark Orubia, a trader at Nairobi-based African Banking Corp., said in a phone interview today.
Snow curbed airlines in Europe for a fourth day as travelers tried to get home for the Christmas and New Year holidays. Paris’s Roissy-Charles de Gaulle and Orly airports stayed open late yesterday to clear a backlog of flights delayed by the snow, and operating hours were extended for four days at London’s Heathrow airport, whose second runway will remain closed until later today. Gatwick airport reopened after suspending outbound flights because of heavy snow.
Tourism accounts for 11 percent of gross domestic product in Kenya, and is the second-biggest foreign-exchange earner after horticulture.
A suspected grenade explosion at a bus terminal in Nairobi yesterday injured at least 30 people and killed three, including the man thought to have been carrying the device, the Standard newspaper reported today.
In July, bomb attacks on two bars in Kampala on the night of the Soccer World Cup final in South Africa took place, killing more than 70 people. Al-Shabaab, an Islamist group in Somalia, claimed responsibility for the attack Al-Shabaab was likely to be responsible for yesterday’s explosions, Ugandan police Inspector General Kale Kayihura told reporters in Kampala today.
“If there will be any effect” on the currency “it will be marginal because it does not expose a major flaw in the security system,” Fred Moturi, a fixed-income dealer at Nairobi-based Sterling Investment bank Ltd., said in a telephone interview today.
To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net
To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.
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