Kenya's shilling depreciated to its weakest level against the dollar on record as increased demand for foreign exchange added pressure on the currency of East Africa's largest economy.
The shilling weakened as much as 0.3% to 111.63 per dollar before paring the loss to trade at 111.49 by 5:00 p.m. in the capital, Nairobi. The shilling depreciated for a fifth straight month in October, its worst stretch of losses in a year, according to data compiled by Bloomberg.
“There is a lot of unmet demand for dollars and there isn't sufficient supply,” said Kenneth Minjire, senior associate for debt and equity at Nairobi-based AIB-AXYS Africa. “Demand by importers and people with dollar liabilities is putting pressure on the currency.”
Plans by the government to sell its maiden green bond is expected to offer the currency some relief before the end of the year, Minjire said. Last week, Kenya named JPMorgan Chase & Co. and Citigroup Inc. as lead arrangers for the sale targeting to raise as much as $700 million by the end of December.
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