Bloomberg News

Kenya Shilling Slides to Year Low as Parties Hold Nominations

January 17, 2013

Kenya’s shilling weakened for a second day, heading to the lowest in a year, as the country’s political parties prepared to nominate candidates for elections in March.

The currency of East Africa’s biggest economy depreciated 0.2 percent to 86.95 a dollar as of 2:01 p.m. in Nairobi, the capital, poised for the weakest since Jan 13, 2012, according to data compiled by Bloomberg.

The elections will be the first since a disputed 2007 vote sparked two months of violence in which more than 1,100 people died. The Coalition for Reform and Democracy, led by Prime Minister Raila Odinga and the Jubilee Coalition of Uhuru Kenyatta are holding party primary elections today. The shilling may weaken in the run-up to the national ballot, Morgan Stanley said in a report on Jan. 14.

“The shilling has weakened due to concern by the market as political parties hold their nominations for candidates for the forth-coming elections,” John Muli, a dealer at Nairobi-based African Banking Corp., said by phone. “There is also demand for dollars from the oil importers.”

The central bank took 4 billion shillings ($46 million) of seven-day repurchase agreements, out of bids of 5.4 billion shillings, having offered 4 billion shillings for sale. The repos are used by the regulator to withdraw money supply from banks and support the shilling.

The Ugandan shilling weakened 0.2 percent to 2,665 a dollar, while Tanzania’s shilling traded unchanged at 1,600 a dollar.

To contact the reporter on this story: Johnstone Ole Turana in Nairobi at jturana@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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