Kenyan shilling sink to a new time low against the dollar
The Kenyan shilling continues to depreciate against major global currencies trading at an all-time high of Sh119 against the United States dollar.
The local currency crossed the mark at the start of trading today.
Dr. Patrick Njoroge, Governor of the Central Bank of Kenya (CBK), has allayed fears of a severe depreciation in local currency while attributing the weakening of the Shilling to the emergence of the dollar as the dominant currency.
“The US dollar has strengthened against the basket of major currencies, and this is what is driving some of the dynamics we have seen in our own foreign exchange market,” he said.
“Those with concerns over the currency depreciating significantly need to understand the dynamics at play.” He added.
The main cause of Kenya Shilling’s persistent depreciation is a stronger dollar, which has caused all other major foreign currencies to decline in value versus the US dollar.
According to the CBK, the performance of the Shilling lies ‘in the middle of the pack’ as other major world currencies see sharper depreciation.
While the Shilling has lost ground on the US dollar and regional currencies such as Tanzania and Uganda Shillings, the local currency has been on a tear against the Euro, British Pound, the South African Rand, and the Japanese Yen.
In the meantime, the US’s rising interest rates, which have caused international investors to withdraw money from emerging and frontier markets in favor of holding dollar assets, have been linked to the higher dollar.
