Kenyan shilling Declines to Record Low of 108.20 Against the US Dollar

The Kenyan shilling dropped to a new record low of 108.2  against the US dollar on Wednesday

The shilling exchanged at 108.20 per dollar in the afternoon which was lower than its morning level of 107.75/95.

The supply of dollars has been squeezed by a lack of tourists and also decreases of exports of other commodities creating a storm for the shilling market.

The change was dragged down by the demand for hard currencies experienced from importers who resumed the business after the country lifted the lockdown early this month by allowing the movement of in and out of the counties both in Mombasa, Nairobi and Mandera.

The average interest weight in the overnight borrowing market has remained constant at a percentage of 2% for weeks now, indicating a surge in liquidity, which usually makes it easier for traders to build up their dollar positions.

The president also decreased the curfew hours from 9hrs – 7hrs respectively.

Experts argue that the shilling crashing due to an increase in demand for dollars by importers after the lockdown.

Additionally, easing travel restrictions has brought many importers seeking to buy dollars in sizeable chunks for the first time since Mid-march when the government closed the borders.

The central bank has also been selling dollars to other banks to reduce the pressure market affected by the increase in liquidity.