Kenya’s shilling weakened, reversing gains made this week, as importers accumulated dollars ahead of elections.
The currency of East Africa’s biggest economy depreciated as much as 0.2% to 87.70 a dollar and traded lower at 87.65 a dollar by 1:08 p.m., snapping yesterday gains, according to data compiled by Bloomberg. The shilling has fallen 1.8 percent this year, compared with a 5.5 percent weakening of the South African rand and 7 percent drop by the Malawian Kwacha, the worst performing African currencies tracked by Bloomberg.
“The Kenyan shilling outlook remained bearish as importers stocked up on dollars ahead of national elections in March,” analysts at Nairobi-based NIC Bank Ltd., led by Bernard Matimu, said in a note to clients today. “The shilling could weaken to 89 before the elections,” it said.
Kenya will hold its presidential vote on March 4, the first since a disputed 2007 poll sparked two months of violence in which more than 1,100 people died.
Tanzania’s shilling depreciated for the third day, weakening 0.4 percent to 1,623.50 a dollar, the lowest since Dec 13, 2011, while the Ugandan shilling weakened 0.3 percent to 2,665 a dollar.