Kenya’s shilling rose the most in seven months amid speculation next week’s presidential elections will proceed without violence.
The currency of East Africa’s biggest economy gained as much as 0.9 percent to 86.55 per dollar and traded 0.6 percent stronger at 86.75 by 1:33 p.m. in Nairobi, climbing the most on a closing basis since July 30, according to data compiled by Bloomberg.
Kenya will hold its presidential vote on March 4, the first since a disputed 2007 ballot sparked two months of violence in which more than 1,100 people died. Police said yesterday they were deploying extra forces in areas perceived as hotspots to prevent fighting.
“The shilling has gained due to the positive sentiment in the market that the elections will be peaceful,” Jeremiah Kendagor, head of trading at Nairobi-based Kenya Commercial Bank Ltd. (KNCB), said today.
The International Monetary Fund said Kenya’s economy may expand 5.5 percent to 6 percent this year, as long as peaceful elections show stability for investors.
“All government agencies are ready for the elections and have put in place mechanisms to ensure they are peaceful,” Ahmed Issack Hassan, chairman of the Independent and Electoral Commission said today on Citizen TV.
The Central Bank of Kenya offered 10 billion shillings ($115 million) of bids for 14 days term-auction deposits today, according to a central bank official who asked not to be identified in line with policy. The bank uses the securities to reduce money supply and support the shilling.
Uganda’s currency traded weaker for the second day, depreciating 0.4 percent to 2,665 per dollar, while the Tanzanian shilling gained for a third day, appreciating 0.4 percent to 1,623.50 per dollar.
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