Kenyan Shilling hits Ksh.119 low

The Kenya Shilling has hit a new record low of Ksh.119 against the US dollar as the currency’s steady decline continues.

The local currency crossed the Ksh.119 mark at the start of trading on Tuesday after backing away from the marker in late trading Monday.

The continued weakness of the Kenya Shilling is primarily attributable to a stronger dollar which has seen all other major world currencies tumble against the green buck.

Meanwhile, the stronger dollar has been tied to rising interest rates in the US which has seen foreign investors pull out funds from emerging and frontier markets in favour of holding dollar assets.

Central Bank of Kenya (CBK) Governor Dr. Patrick Njoroge has attributed the Shilling weakness to the emerging dollar dominance even as he eases concerns of a significant depreciation in local currency.

“The US dollar has strengthened against the basket of major currencies, and this is what is driving some of the dynamics we have seen in our own foreign exchange market,” he said.

“Those with concerns over the currency depreciating significantly need to understand the dynamics at play.”

According to the CBK, the performance of the Shilling lies ‘in the middle of the pack’ as other major world currencies see sharper depreciation.

While the Shilling has lost ground on the US dollar and regional currencies such as the Tanzania and Uganda Shillings, the local currency has been on a tear against the Euro, British Pound, the South African Rand and the Japanese Yen.

In the year to date, the Kenya Shilling has lost an estimated 5.3 per cent of its value against the US dollar.

The local unit is expected to see some respite from rebounding foreign currency inflows from higher exports and diaspora remittances.