Tale Of Three Shillings: Improved Outlook In 2012

BMI View: Although the technical picture suggests that a period of consolidation is on the cards, we do not expect sharp sell-offs for East African currencies over the coming weeks. We believe that the tighter monetary policy and improved external account dynamics will help to support regional currencies over the course of 2012 and we do not expect to see another year of weakness similar to 2011. The weather, global risk sentiment and the monetary authorities' commitment to tight monetary policy all pose risks to this view.

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