Shilling Gains Hinge On Political Resolution

January 2008 | Currency Forecast

Following a 7.3% sell-off in the wake of post-election violence, the Kenyan shilling has recovered somewhat, strengthening by 7.0% since January 4 to at one point trade at KES65.35/US$ (and KES95.87/EUR) on January 10. Given the mass-cancellation of tourist visits, and disruption to trade stemming from the political unrest, in the short term we expect sideways trading or mild appreciation at best to the KES65.50/US$ region - barring a breakdown of political negotiations.

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