The Kenya shilling hit a 14-month all-time low to 114 units against the US dollar Tuesday, signaling a looming crisis in commodity prices.
According to the Central Bank of Kenya (CBK), the Kenya shilling hit a record low to trade at an average of Ksh.114.0 per dollar.
This has been fueled by the economic fallout over the continued war between Ukraine and Russia, with the latter being second-largest producer of crude oil globally.
Benchmark crude futures surged to near the Ksh. 14,817.81 mark this past weekend.
Other conditions that have resulted in a shilling losing value against the dollar are rising interest costs on foreign currency-denominated debt and a widening current account deficit.
A weaker shilling means importers spend more to bring in goods such as petroleum products and raw materials for factories, a development which may result in price increases for consumers in a net import economy.
However, the local unit is still supported by high foreign currency reserves which stood at Ksh.900.6 billion ($7.9 billion) as of March 3 or a respective 4.8 months import cover.
