Kenyan Shilling Depreciates Against The Dollar at 103.6 During The Week

The Kenya Shilling depreciated against the US Dollar during the week to close at 103.6 shillings from 103.3 shillings recorded the previous week due to heightened importer dollar demand brought about by the increased political uncertainty prior to the fresh poll this coming week.

On a year to date basis, the shilling has depreciated against the dollar by 1.1 percent with economic analysts being of the view that the shilling should remain relatively stable against the dollar in the short term, supported by

• The weakening of the USD in the global markets,
• Increased diaspora remittances that grew by 5.3 percent to USD 1.0 billion in 7 months to July 2017 from USD 987.2 million in a similar period last year
• The CBK’s activity, as they have sufficient forex reserves, currently at USD 7.4 billion (equivalent to 4.9 months of import cover).

The key factor to watch is the current account deficit that worsened to 6.2 percent of GDP in Q2’2017, as compared to 5.3 percent of GDP in a similar period last year.