The shilling appreciated against the dollar by 0.43 percent immediately after SCOK made its ruling. [Photo/ standardmedia.co.ke]
Markets on Monday rallied to positive results following the Supreme Court of Kenya (SCOK) ruling that upheld President Uhuru Kenyatta’s re-election.The shilling appreciated against the dollar by 0.43 percent immediately after SCOK made its ruling.The shilling, which closed at 103.60/80 to the dollar on Friday strengthened to 103.45 after Chief Justice David Maraga read the unanimous verdict. However, the shilling was stable until 2.30 pm when it depreciated to settle at 103.70 to the dollar. Before the ruling, the shilling had declined by 0.4 percent to trade at 103.8. But as trading progressed, commercial banks quoted the local currency at a mean of 103.65 to the greenback.Sterling Capital Ltd chief executive John Kirimi said the Kenya shilling depreciated by 0.3 percent against the US dollar last week to close at Sh103.9 from Sh103.6 recorded the previous week due to speculation in the forex market following political uncertainty.Following weakening of the US dollar in the global markets by almost 8.4 percent and Central Bank of Kenya’s activity – which has sufficient forex reserves which are equivalent to 4.7 months of import cover– Kirimi projects the shilling will remain stable against the dollar in the short term.He argues that a key factor to watch for is the current account deficit that slid to 6.4 percent of Gross Domestic Product (GDP) in July as compared to 6.2 percent of GDP in May this year. Breinscope Consultants Ltd CEO Hezbourne Ong’elle said the shilling strengthened immediately after the ruling but bounced back due to increased demand.“A little uncertainty has been cleared, we are now waiting to see the reaction of the shilling after this,” he said. Meanwhile, all the market indicators at the Nairobi Securities Exchange (NSE) increased following the ruling.The NSE-20-Share Index was up by 49.01 points to close at 3779.16 points. The yield on Kenya’s $2 billion (Sh207.2 billion) of Eurobonds fell 0.2 percent to 6.03 percent by 11:17 am in Nairobi, the lowest in almost three weeks.