Kenya Shilling hits record low to 116 units against US dollar
The Kenya Shilling weakened to its lowest level against US dollar Monday, signaling harsh economic times an ordinary Kenya is bearing to put food on the table.
According to data by Metropol Harvest, the shilling dropped to 116 level to trade at Ksh.116.0 against U.S Dollar.
It has depreciated by 0.1 percent in the past one week.
This is the lowest the shilling has depreciated amidst rising inflation both locally and internationally.
It first hit an all-time low of 115 units against the dollar on April 4, 2022.
The depreciation is partly attributable to increased dollar demand from the oil and energy sectors.
For example, oil prices extended gains by Friday last week on supply concerns as the European Union (EU) proposal laid out plans for new sanctions against Russia, including an embargo on crude in six months.
Brent crude futures had climbed 85 cents, or 0.8 percent, to Ksh.12,861.73 ($110.99) a barrel.
Both benchmarks jumped more than Ksh.115.88 ($1) a barrel earlier in the volatile session after gaining more than $5 a barrel on Wednesday.
On a year to date basis, the shilling has depreciated by 2.4 percent against the dollar, in comparison to the 3.6 percent depreciation recorded in 2021.
The shilling is expected to keep losing value on increased demand from merchandise traders as they beef up their hard currency positions in anticipation for more trading partners reopening their economies globally.
The aggressively growing government debt, with Kenya’s public debt having increased at a 10-year Compound Annual Growth Rate (CAGR) of 18.6 percent to Ksh.8.2 trillion in December 2021, from Kshs 1.5 trillion in December 2011 is also putting pressure on forex reserves to service some of the public debt, thus a weaker shilling, according to Cytonn report.