Kenya shilling weakens on energy demand
Kenya’s shilling was
slightly weaker against the dollar on Monday, pressured by dollar
demand from the energy sector and traders said they see the shilling
gaining once tea exports start flowing to Egypt.
At 0815 GMT, commercial banks quoted the local currency at 81.35/55, from Friday’s close of 81.40/50.
“The shilling has
been under a lot of pressure for a while from oil sector dollar demands
and handicapped inflows from tea exporters due to the Egypt crisis,”
said Kennedy Butiko, deputy head of treasury at Bank of Africa.
East Africa’s
biggest economy, which heavily relies on hydropower for its electricity,
has been suffering a drought since late last year and meteorologists
warn that the dry spell could extend into the first half of this year,
spurring demand for diesel to power generators to plug the expected
electricity shortfall.
Egypt’s president,
Hosni Mubarak, stepped down on Friday, bowing to pressure from the
citizens who protested for over two weeks.
During the duration
of Egypt’s protests, Kenya was affected as it couldn’t export tea into
the countries of its leading buyers. Traders said they are expecting the
turn of events to get the sales moving again, offering relief to the
shilling.
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