Shilling cedes ground ahead of presidential poll reaction

The shilling was trading at 103.75/85 to the dollar at mid-day Tuesday. FILE PHOTO | NMG 

The shilling slipped slightly against the dollar Tuesday as the markets awaited announcement from the main opposition leader, Raila Odinga. On Monday, the electoral body declared President Uhuru Kenyatta the winner of a rer-un election boycotted by Mr Odinga.

The shilling was trading at 103.75/85 to the dollar at mid-day Tuesday, slightly weaker than the 103.60/70 it closed at on Monday.

“There was some expectation that political pronouncements by the opposition leader will push demand for dollars higher,” said a bank trader.

“If they (Odinga’s party) said they are going back to the Supreme Court or calling for demonstration then the shilling will come under some pressure.”

However, the opposition on Tuesday did not expressly say they would engage in any potentially disruptive action.

Kenya was plunged into a political crisis that has caused anxiety among investors after the apex court annulled the August 8 election.

Meanwhile, traders said they had seen liquidity in the money market loosen up as bonus payment to tea farmers started on Tuesday.

Tea farmers affiliated to the Kenya Tea Development Agency (KTDA) are usually paid annual bonuses every October. They were on Tuesday set to receive Sh42 billion payable this year.

“The money market has eased up due to KTDA payments. It’s likely to improve subscription on Treasury bills this week,” a trader from another bank said.