Here are our views on the news making headlines today for Kenya:
Shilling feels the pressure as trade deficit rises 59pc. The gap between Kenya’s imports and exports widened a massive 59 per cent or Sh37.7 billion in the first quarter of the year, explaining the significant depreciation of the shilling.
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.