US Dollar Mark Against Kenyan Shilling Heightens

The Kenya Shilling has continued to fall against the US dollar, approaching the 121 level on Thursday, potentially resulting in substantially higher living costs.

The shilling traded at an average of 120.93 to the dollar, up from 120.60 at the start of the month, as global factors like the recent 0.75 percentage point Fed rate hike continued to weigh on economies.

This is, however, the Central Bank of Kenya’s (CBK) indicative rate, which means importers may have to pay a substantially higher price to obtain the dollar.

It follows a drop in currency reserves to $7.3 billion (KES 883.3 billion) last week, down from $7.4 billion (KES 895.5 billion) the previous week—the lowest level in seven years.

Experts say that lower foreign finance, quicker import growth, and a decrease in remittances would continue to weigh on the shilling despite CBK interventions.