The Kenyan Shilling is bracing for a sharp decline, with analysts anticipating for the shilling to breach the 160 mark against the US dollar, compounding financial distress for consumers.
Traders in Kenya have expressed concerns that the shilling seems poised to breach the 160 threshold in its exchange rate against the US dollar, despite the State’s efforts to curb its depreciation.
This development presents a fresh challenge for the Kenya Kwanza administration and the country’s banking regulator.
Historic low for the Kenya shilling
Official data from the Central Bank of Kenya (CBK) revealed that the shilling achieved a historic low as at October 19, 2023, recording an average exchange rate of 149.7882 against the dollar.
As of Saturday, October 21, consumers looking to purchase dollars in banking halls were forking out as much as Ksh 157 per unit due to the escalating demand for the US currency.
Multiple banks also set their selling rates for the dollar within the range of Ksh 155 to Ksh 157. The banks also set the buying rates at ranges varying from Ksh 141 to Ksh 148.
Escalating cost of living in Kenya set to worsen
The ongoing economic turmoil in Kenya has been exacerbated by the weakening shilling, which is anticipated to add to the woes of already struggling consumers.
The devaluation of the shilling therefore presents a significant challenge to Kenya, a nation heavily reliant on imports.
As a result, any further depreciation of the domestic currency is expected to exacerbate the cost of living. This will further impose additional hardships on households already grappling with soaring fuel and food expenses.
