Bloomberg News

Kenya’s Shilling Weakens as Companies Seek Dollars After Vote

April 04, 2013

Kenya’s shilling weakened as businesses sought dollars to restart operations after the country’s Supreme Court upheld Uhuru Kenyatta’s election win.

The currency of East Africa’s biggest economy depreciated 0.2 percent to 84.90 per dollar by 5:44 p.m. in Nairobi, the capital, the first decline since March 26.

“Businesses will start placing their orders for dollars as they seek to ramp up production and the shilling may weaken further,” John Muli, a dealer at Nairobi-based African Banking Corp., said by phone.

The shilling gained earlier this week after the court unanimously confirmed that Kenyatta won the March 4 vote. It rejected a petition from runner-up Raila Odinga, who argued that the electoral process had been marred by irregularities and fraud.

“The shilling is reaping from the peaceful conclusion of the elections, which has removed the political risks that were there earlier,” Finance Minister Robinson Githae told reporters today in Nairobi.

The Central Bank of Kenya took all 9.85 billion shillings ($116 million) in bids for seven-day and 14-day term-auction deposits, according to an official at the institution who asked not to be identified in line with policy. The bank, which had offered 15 billion shillings, uses the securities to reduce money supply and support the shilling.

Uganda’s currency weakened 0.3 percent to 2,597 per dollar, while the Tanzanian shilling gained 0.3 percent to 1,620 against the U.S. unit.

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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