August 17, 2017 / 12:28 PM / 7 months ago

Kenya's shilling rises to a two-month high, election jitters recede

NAIROBI (Reuters) - The Kenyan shilling firmed to 103.25/45 against the dollar on Thursday, its highest level since June 21, after the opposition said the previous day that it would challenge the outcome of last week’s presidential vote in court, traders said.

Dollar banknotes are seen in this picture illustration taken April 28, 2017. REUTERS/Dado Ruvic

The shilling had closed at 103.65/75 on Wednesday. It has rallied from 104.00 shillings per dollar since the Aug. 8 election.

The electoral commission declared President Uhuru Kenyatta the winner of last week’s election by 1.4 million votes. His main challenger, veteran opposition leader Raila Odinga, said on Wednesday he would challenge the results in the Supreme Court.

“If you look at the fundamentals and the political picture, it points to a continuous rally, but I don’t expect it to go beyond 103,” said a trader at a local commercial bank.

At least 28 people were killed in pockets of protests and a police crackdown that followed the announcement of the final result of the presidential election last Friday. But Odinga’s decision to go to court quelled the protests.

“Odinga’s decision to go to the Supreme Court has cut the political risk associated with the election,” said a second trader.

Market participants also said the currency was benefiting from high short-term rates in the local money markets, compared with dollar rates. The overnight rate in the Kenyan market was 7.8 percent, they said.

Reporting by Duncan Miriri; editing by Katharine Houreld, Larry King

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