Jan. 21 (Bloomberg) -- Kenya’s shilling weakened for the second day to the lowest in a year as businesses bought dollars before presidential elections in March.
The currency of East Africa’s biggest economy fell 0.3 percent to 87.10 per dollar as of 3:41 p.m. in Nairobi, the capital, the lowest level since Jan. 13, 2012. The shilling has dropped 1.2 percent this year, compared with a 1.3 percent decline in Tanzania’s shilling and 4.6 percent in South Africa’s rand, the continent’s worst performer.
“With the country headed to elections, demand for dollars is building up,” Julius Kiriinya, a trader at Nairobi-based African Banking Corp., said by phone. “The outcome of the March elections will determine the position of the shilling, with a peaceful election seeing a stable shilling; any political crisis may push it to 89 a dollar.”
The vote will be the first since a disputed 2007 poll sparked two months of violence in which more than 1,100 people died. The shilling will probably weaken in the run-up to the ballot and end the year at 88 per dollar provided the elections are without violence, Morgan Stanley said in a Jan. 14 note. Political parties are scheduled to submit names of contestants today, the Independent Elections and Boundaries Commission said on its website.
The Ugandan shilling weakened 0.2 percent to 2,673 per dollar, while Tanzania’s shilling was unchanged at 1,605 per dollar.
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