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Kenya Private Sector March Contraction

FILE: A container ship is seen as its docked next to cranes at the port of Mombasa, Kenya, October 23, 2019. P

NAIROBI - 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.

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

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

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.