Kenyan Shilling Set for Longest Losing Streak this Year
Kenya’s shilling is on track for its longest stretch of weekly losses this year, despite the central bank’s efforts to prop up the currency, as concerns about a surge in Covid-19 infections spurred dollar buying by importers.
The East African nation’s currency was trading little changed at 108.72 against the dollar by 9:30 a.m. in the capital, Nairobi, poised for a 0.1% decline this week. That would cap the longest stretch of weekly losses since the five days ending December 11, and pare the shillings gain this year to just 0.5%.
“Importers are responding to fears of stiffer Covid-19 restrictions by the government given recent increases in infections,” according to AZA, Africa’s largest non-bank currency broker by trading volume.
Kenya is keeping its night curfew in force and has suspended public gatherings and intergovernmental physical meetings as the coronavirus delta variant fans a surge in cases. That’s partly due to political rallies that have been happening more frequently ahead of next year’s electoral season.
The Central Bank of Kenya’s foreign-exchange reserves declined to $9.34 billion in the week through July 29, from $9.37 billion the prior period, according to data from the central bank. It mopped up 60 billion shillings ($551.7 million) through term-auction deposits this week through Thursday, according to data compiled by Bloomberg, adding to a cumulative 354.8 billion shillings in July.
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