Kenya’s shilling dropped to 104.05/20 Kenyan Shillings per dollar on Thursday the 25th of July 2019, its lowest in nearly two years.
According to Reuters, traders attributed the drop to the uncertainty caused by the announcement on Monday the 22nd Of July 2019, that the finance minister would be charged with financial misconduct.
Since the announcement of the charges, the Kenyan Shilling, has lost 0.8 percent.
Traders said banks had built up their dollar positions as a result of fears that the vacancy at the finance ministry could lead to further weakening of the Kenyan Shilling.
According to Business Daily Africa, a senior currency trader at a commercial bank said, “This has been driven by forwards, banks and clients are holding long dollar positions seeing the shilling could weaken further, so they are covering for their future demands.”
President Uhuru Kenyatta has since appointed Labour Minister Ukur Yatani as the acting finance minister, shortly after the incumbent Henry Rotich was charged with corruption.
The charges against Rotich had also fuelled fears that foreign investors might shun Kenyan assets.
A second trader while speaking to Business Daily Africa said, “It has affected the Eurobond yields and the whole perception, image of the country in the international arena…some investments must have been held back.”
