The Kenya shilling lost ground in mid-year, falling to KSh81.4:US$1 in July, because of worries about the euro-zone debt crisis, but has since recovered, helped by the peaceful outcome of the constitutional referendum and positive sentiment towards emerging markets, to average KSh80.5:US$1 in November, 7.6% weaker year on year but slightly stronger than in October. The shilling will continue to find support from relatively healthy levels of foreign-exchange reserves, robust growth in tea and tourism receipts and continued backing from donors. We expect the shilling to average KSh79.22:U$1 in 2010, before resuming a path of gradual depreciation, sliding to KSh81.5:US$1 in 2011 and KSh83.5:US$1 in 2012, owing to the current-account deficit and higher inflation than in key trading partners. The currency will find some stability in 2013-15, around the KSh85-86:US$1 mark, helped by a stronger trade performance, although more rapid depreciation is likely if political or economic confidence slips.