Shilling sinks past 110 mark again
The Kenyan shilling has slumped past the Ksh.110 mark in its valuation against the US dollar for the second time in two months.
This is as recent gains which saw the shilling put up a fight against world major currencies wear off at the start of the year.
The local unit was quoted at Ksh.110.03 on Thursday afternoon, a sharp contrast to a recent Ksh.108.75 high on Christmas Eve 2020.
According to analysts, the renewed weakening in the local unit is no surprise as the local currency remains in a weakened environment.
The shilling continues to take a beating from declining dollar receipts from sectors such as tourism and horticulture, a factor exacerbated by a growing demand for hard currency by investors.
Recent interventions by the Central Bank of Kenya (CBK) to smoothen out volatility including mop-up activity and the sale of dollars from its reserves have had a short-lived effect.
Last year, the shilling depreciated by 7.7 per cent closing the year at Ksh.109.2 against the US dollar compared to Ksh.101.3 at the close of 2019.
The shilling’s weakening has however not occurred in isolation with other major currencies on the continent marking a similar rot.
The South African rand for instance depreciated by five percent against the dollar in 2020 while the Nigerian Naira and Zambian Kwacha marked the greatest slide shedding 24.4 and 50.4 per cent of their value against the green buck.
Neighbouring Uganda was however off the hook as its shilling appreciated by 0.4 per cent against the depreciation chaos.
The weakening of currencies picked up following the emergence of COVID-19 as a pandemic in the second quarter of 2020.
The Kenyan shilling hit its lowest point on December 15 as it touched Ksh.111.60 to the dollar before reversing a marginal part of its losses in the subsequent week.