Kenya’s shilling fell for a second day, retreating to its lowest in more than four months, as the nation’s trade deficit widened due to higher imports.
The currency of East Africa’s biggest economy depreciated as much as 0.8 percent and traded down 0.5 percent to 86.35 by 2:24 p.m. in Nairobi, the weakest since Jan. 16 on a closing basis, according to data compiled by Bloomberg.
Kenya’s trade deficit increased in March as fuel imports rose to the highest in seven months, the Kenya National Bureau of Statistics said today on its website. The gap increased 22 percent from a year earlier to 80.3 billion shillings ($930 million).
“The shilling is under pressure from the widening of the trade deficit through increased imports at a time earnings are not strong enough to meet demand for dollars,” Duncan Kinuthia, a dealer at Nairobi-based Commercial Bank of Africa Ltd., said in a phone interview today. “On a daily basis we are seeing panic buying as businesses accumulate dollars in anticipation of further weakening,” he said.
Imports rose 14 percent to 124.6 billion shillings, with fuel shipments accounting for about a third of the total. Exports increased 1.1 percent to 44.4 billion shillings. The three-month trade gap was 197.5 billion shillings, up 18 percent from a year earlier.
Kenya, the world’s largest exporter of black tea, sold 31,280 metric tons of the leaves in March, down 13 percent from a year earlier, earning 7.8 billion shillings. Coffee sales rose 21 percent to 5,069 metric tons.
Ugandan shilling was little changed at 2,479.5 per dollar while Tanzania’s shilling appreciated 0.2 percent to 1,586.33 per dollar.
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