Kenya’s shilling fell for a fourth day as importers exchanged the local currency for U.S. dollars to be used for overseas payments before an expected interest rate cut tomorrow.
The currency of East Africa’s largest economy dipped less than 0.1 percent to 86.60 a dollar by 12:48 p.m. in the capital, holding steady at the lowest in more than seven months, according to data compiled by Bloomberg.
“The Monetary Policy Committee is meeting tomorrow and we’re expecting a rate cut,” Julius Kiriinya, a dealer at Nairobi-based African Banking Corp., said by phone. “There is panic and demand from importers across the board. They are buying dollars before the rate cut to be able to pay their bills later in the month.”
All but one of the 10 economists surveyed by Bloomberg News expect the central bank to cut its benchmark lending rate tomorrow. Seven economists expected a 1 percentage point reduction, one forecast a 1.5 percentage point cut and another predicted a 2 percentage point decrease. One analyst said the rate will remain unchanged at 11 percent.
Uganda’s shilling gained 0.6 percent to 2,697.50 a dollar, heading for its biggest increase since Dec. 24, while the Tanzanian currency rose less than 0.1 percent to 1,594.50.