High Dollar demand weakens shilling further to 115.7 level
The Kenya Shilling has increased its vulnerability pace against the U.S Dollar, indicating a piled pressure on common commodity prices for Kenyans.
Data from the Central Bank of Kenya (CBK) shows the shilling is now exchanging at its lowest record of Ksh.115.7 against per dollar, with only o.3 units remaining to attain 116 level.
This has been fueled by the economic fallout over the continued war between Ukraine and Russia, with the latter being the second-largest producer of crude oil globally.
The shilling is speculated to weaken to its lowest even further because Indonesia is imposing a ban on palm oil export to balance its domestic consumption.
Indonesia which produces more than half of the world’s palm oil makes it the largest exporter of the commodity.
The depreciation of the Kenyan Shilling implies a higher cost in Shillings to finance imports.
A weak Shilling also discourages the final consumption of luxury imports as it promotes domestic investments that lead to job creation.