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Currencies

Kenyan Shilling rallies against dollar after Supreme Court ruling

The shilling gained 0.2 per cent intraday on Monday after the ruling was announced to trade at 103.50/70 to the dollar. PHOTO | FILE | NMG
The shilling gained 0.2 per cent intraday on Monday after the ruling was announced to trade at 103.50/70 to the dollar. PHOTO | FILE | NMG 

The shilling, which had slipped in early trading ahead of a Supreme Court ruling on last month’s presidential election, recovered after the apex court judges unanimously dismissed petitions to annul the vote.

It gained 0.2 per cent intraday after the ruling was announced to trade at 103.50/70 to the dollar from the 103.70/90 it was in earlier trading. It had closed at 103.65/85 on Friday.

Market analysts said the decision by the apex court was interpreted as an end to the prolonged electioneering period that has threatened to turn violent in recent months.

“The Supreme Court have wielded a guillotine. A further 90 day election and the attendant uncertainty would have been unconscionable for the markets,” said Aly-Khan Satchu, an independent analyst and CEO at Rich Management.

A September 1 decision by the court that annulled a presidential election shocked markets, sending the shilling and stocks tumbling as investors scampered for safety in dollars and bonds.

Tight liquidity in the market due to persistent open market operation by the central bank, which also sold dollar to calm shilling’s volatility, helped the currency to weather the political after-currents.

The shilling has been steady most of this year. It has depreciated about 1.6 per cent this year, which is marginal compared to currencies in commodity exporting African nations like Nigeria.

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