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Kenyan shilling weakness temporary-Finance Minister
May 30, 2012 / 3:17 PM / 6 years ago

Kenyan shilling weakness temporary-Finance Minister

ARUSHA, Tanzania, May 30 (Reuters) - Kenyan Finance Minister Robinson Githae said on Wednesday he was confident the recent fall in the shilling was only due to temporary factors and the pressure would soon ease.

Speaking to Reuters on the sidelines of an African Development Bank summit in Tanzania, Githae said the pressure on the shilling was coming from banks converting the local currency to pay dividends to overseas investors.

“We are confident that this is a temporary case. By the end of this month, this pressure will go down,” he said.

“There is no change in fundamentals. What is happening is that most banks’ financial year ends on December 31. This is the month they remit dividends overseas,” Githae said.

The shilling fell as low as 86.85 to the dollar on Wednesday, it’s weakest level since Jan. 17.

The finance minister also said inflation seemed to be slowing faster than expected. Data released on Wednesday showed the inflation rate dropped to 12.22 percent in May from 13.06 percent the previous month, the lowest since April 2011.

“If we continue like this, by September we will be in single digits, even earlier than what we had expected,” he said. (Reporting by Duncan Miriri; Editing by David Clarke)

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