Kenyan Shilling Pares Post-Election Rally as Business Resumes
Kenya’s shilling retreated, paring the rally this week that sent the currency to its strongest in more than four months, as companies demanded dollars on resuming operations after the presidential election.
The currency of East Africa’s biggest economy dropped as much as 0.6 percent to 85.91 per dollar and was trading 0.2 percent lower at 85.58, the weakest since March 6, by 12:05 p.m. in the capital, Nairobi. The exchange rate is up 0.8 percent for the week, according to data compiled by Bloomberg.
Election victor Uhuru Kenyatta, who is preparing for trial at the International Criminal Court, will be sworn in as president on March 26, unless a petition is filed at the Supreme Court. The party of outgoing Prime Minister Raila Odinga, whose dispute of the 2007 election triggered ethnic clashes that left more than 1,100 people dead, has postponed filing a petition challenging Kenyatta’s victory, Lands Minister James Orengo told reporters in Nairobi today.
“The shilling gave up a bit of the earlier gains after the peaceful elections on growing demand for dollars as businesses resume their operations,” Jeremiah Kendagor, head of trading at Nairobi-based Kenya Commercial Bank Ltd. (KNCB), said in a phone interview.
Kenya’s economy may expand 5.5 percent to 6 percent this year, as long as peaceful elections provide stability for investors, according to the International Monetary Fund last month.
The Central Bank of Kenya offered 15 billion shillings ($175 million) of bids for seven-day repurchase agreements and 14-day term auction deposits, an official, who asked not to be identified in line with policy, said by phone today. The bank uses the repos to reduce money supply and support the shilling.
Uganda’s currency traded unchanged at 2,640 per dollar, while the Tanzanian shilling weakened 0.1 percent to 1,625 per dollar.
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