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Economy

Kenyan shilling falls, eyes on rate-setting meeting

Date: Jul 7, 2015

Kenya's shilling fell on Tuesday to a 3-1/2-year low, with traders citing panic buying by some importers after the currency hit 100 against the dollar and as the market focused on a central bank policy meeting.

At 0742 GMT, commercial banks quoted the shilling at100.20/40 to the dollar, compared with Monday's close of100.10/20.

Earlier in the session, the shilling touched a low of100.30/50, a low last reached in October 2011. "It's just being driven by panic buyers. I think having crossed that 100 mark... there was a lot of panic buying. That's the main reason," a trader at one commercial bank said.

News from the meeting of the central bank's rate-setting Monetary Policy Committee is expected sometime after 1200 GMT.

"The next direction will mainly depend on what the MPC says in the afternoon," the trader said.

A Reuters poll on Monday forecast the central bank would hold its benchmark interest rate at 10.0 percent, waiting until September to raise it by 75 basis points.

The shilling weakened sharply on Monday, hurt by global demand for the dollar and worries about Kenya's current account deficit. It hit its all-time low of 107 in October 2011.

--reuters--