Kenyan Shilling Drops to 106 Against the US Dollar

The Kenyan shilling remains on a downward trend and hopes of recovery are diminishing as it fell to 106 against the US dollar, close to its all-time low of 107 raising prospects of high consumer prices because a great portion of the country’s activities relies on imports. Current statistics indicate that the difference between foreign currency inflows in Kenya and foreign currency outflows increased by 22.7 per cent to Sh 623 billion in the year.

The Kenyan Shilling, as at Monday, marked a total loss of 16 per cent against the dollar in 2015 and is now reeling under the weight of a rising import bill and a looming interest rate hike by the US Federal Reserve Bank. Financial experts predict that the figure might rise even higher with some saying it might hit the 110 mark.

The Central Bank of Kenya has in the last few weeks been very active in its open market operations, mopping up the Kenyan shilling’s liquidity, driving the interbank rates up to 26 per cent but as it stands, the move seems not to be working towards the desired effect.