Kenya private sector activity in March; weaker shilling hurts - PMI

Kenyan private sector business activity contracted in March, albeit at slower pace than a month earlier, hurt by rising prices, a weakening shilling and a lack of access to dollars, a survey showed on Wednesday.

The Stanbic Bank Kenya Purchasing Managers' Index (PMI) rose to 49.2 in March from 46.6 a month earlier, but remained below the 50 mark denoting growth in business activity.

The survey compilers said 30% of respondents cited difficulty in getting hold of dollars as well as increased taxes and higher fuel prices that led to a rise in purchase prices.

"The latest contractions in output and sales were centered on wholesale and retail companies. By contrast, manufacturing, agriculture, construction and services recorded expansions," Stanbic Bank said in comments accompanying the survey.

Inflation held steady at 9.2% year-on-year in March.

Kenya's shilling is down 7% against the dollar this year and has touched a series of new lows.

Last week, Kenya's central bank said the revival of interbank foreign exchange trade two weeks earlier - alleviating the shortage of dollars - had smoothed out volatility in the shilling exchange rate.