Economics
Stress Building in Kenyan Credit Markets Spells Doom for Growth
- Losses on shilling debt exceed all other emerging markets
- Stocks tumble as authorities seize two smaller banks
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Doubts are growing about Kenya’s ability to keep economic growth on the boil as it battles a plunging stock market, surging debt costs and a weaker currency.
Kenyan shilling bonds have lost more money this month than the local securities of 31 emerging markets tracked by Bloomberg, while equities in East Africa’s largest economy dropped the most out of 93 global indexes. Efforts to stabilize the shilling have sucked liquidity out of foreign-exchange and money markets, spurring a scurry for cash that is driving short-term borrowing costs higher just as the central bank takes over the management of two lenders.