Kenyan shilling volatile after court nullifies presidential polls

Source: Xinhua| 2017-09-01 21:05:59|Editor: Song Lifang
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by Bedah Mengo

NAIROBI, Sept. 1 (Xinhua) -- The Kenyan shilling is facing volatility after the Supreme Court nullified the win of President Uhuru Kenyatta in Aug. 8 polls.

The court agreed with Kenyatta's main challenger Raila Odinga, who argued that the elections were not free and fair, and called for a repeat of polls within 60 days.

The currency had begun Friday trading at an average of 103 percent after strengthening by 0.04 percent on Thursday.

In the early morning trading, the shilling had even strengthened to 102.8 against the dollar, according to the Central Bank of Kenya.

However, after the court ruling, commercial banks quoted the local currency at between 103.20 and 103.40 against the dollar.

Traders at the financial institutions blamed the volatility the shilling faced on panicky investors who put pressure on the currency.

Analysts at Cytonn, a Nairobi-based investment firm, had noted that the outcome of the election petition would play a role in determining the performance of the shilling in the short-term.

However, according to them, whatever the direction the shilling takes, they expect the forex exchange reserves level, currently at 7.5 billion dollars, an equivalent of 4.96 months of import cover, to support the currency.

They noted the level would be maintained by expected inflows from tourism, tea and horticulture exports and Diaspora remittances.