Kenyan’s violence unsettles markets
VIOLENT pro
tests against
the outcome of Kenya's presidential election have caused a sell-off in the country's currency and sent key stocks falling.
The Kenyan shilling dropped 7per cent against the US dollar after the opening of the foreign exchange market was delayed.
Kenya's stock exchange also opened late, while the world's biggest tea auction, held weekly in the port city of Mombasa, has been postponed.
President Mwai Kibaki has been accused of vote-rigging to win the election.
Violence has broken out across Kenya with at least 250 people killed as Mr Kibaki's supporters have clashed with those of opposition leader Raila Odinga.
With no clear cut election result, there is a lot of uncertainty and the market is looking shaky.
Kenya is in East Africa's largest economy. It relies largely on tourism and agriculture for growth, but it is also a regional centre for manufacturing and financial services.
Kenya's currency fell to 68 shillings against the US dollar from 63.50 on 24 December, the last day of trading before the new year.
ACI Kenya, the body representing local money market makers, said it had discussed delaying currency trading with the country's central bank.
It wanted to give commercial banks time to talk with clients and assess their currency requirements, and possible demand levels for the US dollar.
"With no clear cut election result, there is a lot of uncertainty and the market is looking shaky," said ACI chairman Bryan Muigai.
Many investors will be looking to buy dollars as they are seen as a safer investment and asset than the Kenyan shilling in times of turmoil.
Stock traders also sold shares in major Kenyan firms, with Barclays Bank of Kenya shedding 5per cent to 75 shillings, and Kenya Commercial Bank declining 6per cent to 26 shillings, according to a Nairobi Stock Exchange official.
The country's benchmark index NSE-20 index is priced once a day at the close at 1200 GMT.
Business leaders have warned that the government will lose about 2bn shillings ($31,000) a day in tax revenues for every day companies have to stay closed due to the strife.
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