The Kenyan shilling hit a historic low on Tuesday, closing the day at 109.25 shillings against the dollar, indicating the pressure the local currency is going through.
The drop was a buildup to Monday’s drop where the shilling registered another historic hit of 109.20 shillings to the dollar.
The Kenyan shilling has come under pressure in the last few months (in the face of Covid-19) due to the demand of the dollar for the importers and business people.
Tuesday’s run marked the 12th day of the shilling losing ground consecutively after going off the grid and hitting a low of 108.83 shillings to the dollar on November 2, 2020.
The sustained weakening of the shilling is likely to push up prices of basic commodities due to inflation. It is also likely to affect exports from the country, in the wake of lockdowns in Europe due to the second wave of the Covid-19 pandemic.
A summary of the performance of the shilling last week as compiled by Cytonn Investments showed that the shilling shed off 0.2 percent to end the week at 109.1 shillings to the dollar from 108.9 shillings to the dollar the previous week.
On a year-to-date basis, the local currency has depreciated by 7.7 percent against the dollar. Analysts say the fall will still be witnessed.
When Covid-19 came knocking, so many economic activities were affected within and without Kenya. Businesses shut down and millions lost their jobs.
The cessation of movement in and out of the country by President Uhuru Kenyatta made things worse and the hope of the economy ever-rising diminished.
When the President finally lifted the cessation of movement, the shilling bloomed as Kenyans started moving across the country, some importing goods and traveling outside the country for business.
With the increase in the new Covid-19 cases, the shilling seems to be ailing.