The Kenya shilling fell by almost 0.45 per cent an hour after the Supreme Court declared the August 8 presidential elections null and void.
The Nairobi Security Exchange (NSE) briefly halted trading due to severe crash after panicky transactions mostly by foreign investors were registered on most counters.
The Supreme Court invalidated President Uhuru Kenyatta’s re-election win due to what it termed as massive irregularities committed by the polls body.
Losses registered at the NSE amounted to Sh50billion in just 10 minutes after the ruling.
At about 12pm, less than an hour after the court’s ruling, commercial banks quoted the shilling at 103.20/40 per dollar, compared with 102.75/95 at Thursday’s close.
“There was a bit of euphoria,” said a trader from a leading commercial bank, referring to market volatility ensuing immediately after the ruling. “If offshore investors panic, the shilling might come under pressure”.
Markets hate uncertainty and clearly the Supreme Court’s decision has injected an unprecedented amount of uncertainty into the equation.
“The markets have a clear preference for the largely free market economics of President Kenyatta and hence the sharp and precipitous drop,” Aly-Khan Satchu, the chief executive of Rich Management, an investment advisory firm, said via mail.
The court ordered fresh elections within 60 days.
