Here are our views on the news making headlines today for Kenya:
Kenyan shilling weakens on increased end-month dollar demand, June inflation rate raises to 7.03%.
Our View: The weakness is resulting from a couple of factors including concerns over the Greek debt crisis, gaping current account deficit as well as the rising market liquidity. We acknowledge the CBK’s efforts to help stabilize the shilling through contractionary measures and liquidity mop ups. However, the widening current account deficit will continue to pressurize the shilling exacerbating inflation rates above the government targets.