Kenyan Shilling has depreciated by 1.4pc Year To Date

The Kenya Shilling remained relatively stable last week to close at Kshs 103.9, despite having hit a low of Kshs 104.0 on the eve of elections, due to last minute dollar demand from oil and retail importers.

On a year to date basis, the shilling has depreciated against the dollar by 1.4%. The relative stability is because the dollar has also been depreciating against the other major currencies. Against the Euro, Yen and the Pound, the shilling has lost 13.8%, 8.6% and 6.8% YTD, respectively.

The significant depreciation against the Euro, Yen and Pound is mainly because these currencies have appreciated against the Dollar as a result of weakening economic fundamentals in the US compared to the Eurozone, UK and Japan that have pushed further the expected path for the US interest rate hike cycle.