Shilling hits new low of 122.64 against the dollar

Shilling hits new low of 122.64 against the dollar
Shilling hits new low of 122.64 against the dollar

Africa-Press – Kenya. The Kenyan shilling dropped to a new low against the dollar on a Monday morning, in a series that has prevailed since May 2020.

The Google currency tracker mapped the Kenyan shilling at 122.64 units against the greenback immediately after the market opened before gaining to Friday’s value of 122.15.

The weakening trend in the Kenyan shilling is set to continue into 2023, with the US tipped for additional rate hikes, including in December.

Rate hikes in the Eurozone and the United Kingdom are, however, widely expected to have a lesser impact on the shilling as the pair of economies suffer from the fall-out of the Russia-Ukraine crisis.

Analysts expect the shilling’s losses to persist throughout 2023 and expect the mean exchange rate to stand between 125 and 128 across the year.

So far in 2022, the Kenyan shilling has shed eight per cent of its value against the U.S dollar.

This has put traders in a tight position, limiting their import power.

Consumers have been forced to shoulder the high import costs, pushing up the cost of living.

In October, inflation rose to a 7- year high of 9.6 per cent.

The stronger US dollar has also hit at Kenya’s official foreign currency reserves, which presently stand at an equivalent of four months of import cover, to equal the Central Bank of Kenya (CBK) prescribed lower limit.

Compared to other regional currencies in Sub-Saharan Africa, the local unit has sat ‘in the middle of the pack,’ according to the CBK.

The relative stability of the Kenyan shilling has been partly held up by increased remittances and improved exports in 2022.

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