Kenyan Shilling Poised for Steepest Retreat in Seven WeeksEric Ombok
Kenya’s shilling headed for the steepest loss in seven weeks on speculation a rally that pushed the currency to its strongest level in three months was overdone as East Africa’s biggest economy slows.
The currency retreated for a second day after the National Bureau of Statistics said yesterday Kenya’s hotels and restaurants industry contracted in the second quarter. The shilling has gained 0.7 percent since Sept. 20, the day before al-Shabaab Islamist militants attacked a shopping mall in the capital, Nairobi, that left at least 67 people dead.
“Importers demand for dollars and profit-taking by banks” weakened the shilling, John Muli, a dealer at Nairobi-based African Banking Corp., said in a phone interview today.
The currency weakened 0.5 percent to 86.75 per dollar by 4 p.m. in Nairobi, the capital, the biggest decline on a closing basis since Aug. 12. It strengthened to 86.10 per dollar on Sept. 30, its highest level since July 2, according to data compiled by Bloomberg.
The tourism industry in Kenya contracted 11.4 percent in the three months through June, compared with a growth of 2.9 percent a year earlier, as gross domestic product slowed to 4.3 percent in the same period, according to the statistics bureau.