Kenya’s shilling reversed gains, weakening in the first week of the year as businesses bought more dollars for imports.
The currency of East Africa’s biggest economy depreciated as much as 0.4 percent to 86.55 a dollar and traded 0.2 percent weaker at 86.45 a dollar by 2:44 p.m. in the capital, Nairobi. A close at that level would be the worst weekly close in six, according to data compiled by Bloomberg.
“The Kenyan shilling continued its slide against the dollar due to demand from the manufacturing and energy sectors,” Nairobi-based NIC Bank Ltd. said in a note to clients today. “Sentiments still point towards a bearish shilling to target 87.00.”
The Central Bank of Kenya’s Monetary Policy Committee, led by Governor Njuguna Ndung’u, is scheduled to meet on Jan. 10. The central bank will have a benchmark rate of 10 percent this year, according to the median estimate of four economists’ forecasts surveyed by Bloomberg in November.
Inflation slowed for the 13th consecutive month in December, to 3.2 percent from 3.3 percent in November, slipping further below the government’s target and boosting expectations the central bank will continue to ease monetary policy.
The Ugandan shilling weakened 0.4 percent to 2,710 a dollar, while Tanzania’s shilling depreciated less than 0.1 percent to 1,592 a dollar.