The Kenya shilling did not lose against the dollar even as fears of the impact of the election on the economy intensified.
On the eve of the election, however, the shilling weakened slightly against the greenback, trading at Ksh103.90 buying and Ksh104.05 selling, attributed to last-minute demand from retailers and oil importers buying dollars ahead of elections.
At the close of last week, banks quoted the shilling at Ksh103.70 buying and Ksh103.90 selling, a rate that prevailed for three days after the elections, compared with the previous week where it traded at Ksh103.86 against the greenback.
Traders anticipated bullish movement after the elections.
Central Bank of Kenya has increasingly intervened in the market through sale of dollars to banks and withdrawing liquidity amid depreciation pressure on the shilling, even as the CBK governor Patrick Njoroge cautioned dealers against speculating on the Kenyan shilling with regard to the national elections.
Last month, the Kenyan shilling suffered hit a six month low of Ksh104.5 due to dollar demand from food and oil importers and firms paying dividends to investors abroad.
“Although we expected some capital flight with the elections, the regulator has enough to cushion the shilling,” said one market analyst.
Last week, commercial banks quoted the Uganda shilling at Ush3,610 and Ush3,620.
The Tanzania shilling was trading at Tsh2,236 and Tsh2,238 last week against the dollar and remained stable against the Kenyan shilling.
According to Reuters news agency, the Tanzanian shilling’s will remain stable in the near term, helped by dollar inflows from tourism and agriculture sectors and subdued dollar demand from importers.