Kenya Shilling Weakens Versus Dollar, Set for Third Yearly Loss

Kenya’s shilling weakened and headed for its third straight yearly loss against the dollar, as inflation stayed below target and raised expectations of deeper interest-rate cuts.

The currency of East Africa’s largest economy declined less than 0.1 percent to 86.10 a dollar by 12:08 p.m. in Nairobi, the capital. A close at that level would mark a 1.2 percent depreciation in 2012 and the lowest year-end close since at least 1989, when Bloomberg began tracking the data. The shilling weakened 5.4 percent last year and 6.5 percent in 2010, according to data compiled by Bloomberg.