IMF Accuses Kenya of Over-valuing the Shilling by 17.5 Percent

IMF Accuses Kenya of Over-valuing the Shilling by 17.5 Percent

The International Monetary Fund (IMF) claims that Kenya is artificially manipulating the shilling in order to make it appear strong.

In a statement quoted on Bloomberg, the Washington-based global body that gives loans when countries are in financial crisis says that the local unit is 17.5 percent over-valued.

This means that a 100 shilling note is not worth the paper it's printed on and should only buy items that are only worth Sh83.5.

The claims by IMF comes at a time when a section of Kenyan economists raised questions on the apparent stability of the Kenyan shilling after a prolonged electioneering period.

The local unit traditionally loses value after every general election and inflation tends to soar.

The IMF has consequently reclassified the Kenyan shilling from “floating” to “other managed arrangement” to reflect the currency’s limited movement as a result of periodic central bank interventions. This move could lead to foreign exchange volatility as the market absorbs the effects of an overvalued currency. 

The shilling has remained stable at Sh101-Sh102 against the US dollar. A volatile foreign exchange market might throw Kenya’s economy into a whirlwind.

Should this happen, importers will be the biggest losers while those paid in dollars and exporters will gain.

Comments

Diana (not verified)     Thu, 10/25/2018 @ 02:29pm

Why are they lying to us in diaspora?
They are destroying people businesses with these lies.

This is crazy.
Thanks IMF

Guest007 (not verified)     Thu, 10/25/2018 @ 04:22pm

This is called applying pressure. They were expecting Gava to borrow heavily from them so that some folks somewhere can make a profit. Hope some will understand why Africans prefer to borrow from China

mkenya halisi (not verified)     Thu, 10/25/2018 @ 04:38pm

@Diana the imf r the ones lying to u n us.We clearly know how this western lead imf works.They love to control the currencies especially from the so called countries which have borrowed from the great China who is already the supa pawa.Ask yourself how comes this imf never talks shit about the us,canada $ or Britain pound or Australian $.If you dont leak the imf as a country they will always b negatives about yr country n yr continent.Why is the wirkd controlled by the usa$ not the british pound which is always double n strong?????

mkenya halisi (not verified)     Thu, 10/25/2018 @ 09:50pm

@Mugikuyu if u follow siasa the main reason why they started bringing Libya dwn is coz the libya currency was becoming stronger that the us$ n the iraq currency too during sadam?They wanted to steal oil cause chaos so the both countries could collapse n well they succeeded.How comes they never have sny issues with saudiarabia yet they have issues with the riches country in the world Qatar??Its all about controlling n leaking their Ass n if u dont oooh they will create all the bullshitting propagandas???But Thanx God to the Great China n African development bank which r loaning our continent cash without bin told to leak them or use it this way that way??Please @Diana n @Guest hopefully u reaserch stuff b4 bin negatives most of the time about Africa where u call home n will always b home to your 99.9% of yr pple

Jamama (not verified)     Sat, 10/27/2018 @ 10:52am

The economy is in the doldrums but the shilling is still strong. The figures don't add up but the charade can only continue for a while.

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