Traders’ strife for dollars continues as shortage becomes ‘new normal’

Local traders including manufacturers and merchant traders have continued to experience dollar shortages as the supply of the green buck remains constrained.

A source within the manufacturing industry told Citizen Digital that dollar shortages had become somewhat of a norm despite muted dollar shortage concerns over recent weeks.

“Nothing much has changed. It is still quite tight. People have just gotten used to struggling for dollars and that’s where we stand,” the source stated.

In a meeting with the Central Bank of Kenya (CBK) last month, player’s in Kenya’s private sector pushed for banks to ensure equal access to dollars as part of the cure to the crunch.

In spite of the discussions which brought together various associations including the Kenya Association of Manufacturers (KAM) and the Kenya Private Sector Alliance (KEPSA), the antidote appears to have been short-lived as the dollar strife treads on.

“There was a little bit of improvement from the banks side but I can’t say we are yet to get out of the situation. The flows go up and down. It depends on the different days and the different banks,” added the source.

Citizen Digital understands the CBK is yet to hold any further meetings from early June relating to the dollar shortage.

Even so, more concerns around the constraints continue including the perceived emergence of a parade dollar market as dollars change hands at between Ksh.120 and Ksh.125 against CBK’s exchange rate of just under Ksh.119.

The long supply crunch has nevertheless in turn hit at the demand for dollars to in effect ease out the shortage crisis.

Moreover, the recent trend of falling commodity prices is set further ease the dollar shortage situation.

This as Ukraine grain exports are expected to once again hit the global market after the striking of a deal allowing for the shipments by sea with Russia last week.

At the same time, cooking oil prices have been coming off peaks in recent weeks pointing to a lesser demand for dollars as import costs trend downwards.