Kenya’s shilling depreciated for a third day, the longest losing streak in almost two weeks, on speculation the central bank will retain the benchmark rate at a meeting tomorrow.
The currency of East Africa’s biggest economy retreated 0.2 percent to 83.30 to the dollar and was trading 0.1 percent weaker at 83.18 at 1:01 p.m.
The central bank monetary policy committee is expected to meet tomorrow, with five out of eight economists polled by Bloomberg expecting it to retain the benchmark rate at 18 percent. The committee left the key lending rate at a record high for a third meeting last month, after increasing it six times last year to keep the inflation rate under check and support the shilling.
“The country’s balance of payments outlook remain a concern, with rising global oil prices being a threat to the stability of the exchange rate,” NIC Bank Ltd. (NICB) said in a market brief today.
The inflation rate declined for a fourth month to 15.61 percent in March from 16.69 percent in the previous month, the Nairobi-based Kenya National Bureau of Statistics said in an e- mailed statement on March 30. On a monthly basis, prices rose 1.3 percent after falling 0.04 percent in February, it said.
Tanzania’s shilling snapped a two-day losing streak, gaining 0.2 percent to 1,590 against the dollar, while the Ugandan shilling appreciated the most in more than three weeks, rising 0.8 percent to 2,500 per dollar at 13:01 p.m. A close at this level will be the largest advance since March 9., according to data compiled by Bloomberg.
The central bank of Uganda left its benchmark rate unchanged at 21 percent yesterday.
“Bank of Uganda is sounding a much more cautious note on the inflation outlook and concerns over the likely foreign exchange implications of more easing, and the threat of high oil prices,” Razia Khan, regional head of research for Africa at Standard Chartered Plc, wrote in a note yesterday. “This time, notwithstanding the improvement in inflation in March, we have a clear statement that the risks to inflation have risen and that non-food inflation remains a concern.”
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