How Value of Kenyan Shillings Has Depreciated in a Year
Kenya has been grappling with a decline in the value of its currency, not only against the dollar but also the euro and pound.
The costs of both local and imported products have escalated in recent times. Earlier in 2022, the American dollar was valued at Sh120.8, whereas current evaluations place it at Sh134, representing a considerable decline in the Kenyan shilling. On October 4, 2023, the shilling slid further to Sh148.4 against the dollar, a drop from last week's rate of Sh147.8. The shilling has continued to lose its value despite President William Ruto's vow to bring the exchange rate below Sh120. Trade Cabinet Secretary Moses Kuria had also echoed the government's effort to achieve an exchange rate of Sh85 between the US dollar and shilling.
The depreciation of the Kenyan shilling against the British pound is also raising concerns amongst Industry analysts. Central Bank of Kenya (CBK) states that the shilling has depreciated from Sh135.4 to Sh180.3 relative to the pound. Notably, the Kenyan shilling has faced a decline against currencies such as the Euro, Ugandan shilling, and Tanzanian shilling. For example, the Kenyan shilling, once valued at Sh118.3 against the Euro in 2022, has now breached the Sh155.5 mark. Consequently, there has been an upsurge in the prices of fuel and imported goods like 'Mitumba' (second-hand clothes).
In August, the Energy and Petroleum Regulatory Authority (EPRA) stated that the current weighted average cost of imported fuel stood at $774.67 per cubic metre. This represented a notable increase from June's value of $691.76 per cubic metre. Rising import costs due to the weaker shilling against the US dollar have also caused a hike in the price of second-hand clothing. Mitumba traders, particularly affected by this downturn, have disclosed that they now have to pay 2 times more for importing goods.
The price of importing a 40-foot container from China has remarkably increased, surging from $3,000 (equivalent to Sh445,200 using the current exchange rate) to $9,000 (approximately Sh1.34 million). Furthermore, inflation has caused the average household to find it necessary to allocate around Sh3500 every day for nutritious meals; this is three times higher than merely two years ago.
Comments (6)
Na bado what are we exporting apart from brain drain?Shenzi. Madeni ,big government , corruption, high salaries for the stupid people in goverment can explain how he shilling has depreciated.
Blessed are the currency manipulators for they shall inherit the earth. There is some big time play going on here.The global elite$ are intentionally taking down the global economies and destroying currency values. They want one global economy and an electronic currency so they can take total control over the masses
Another overlooked fact is the intended consequences of inflation caused by the millions of schillings politicians were pouring into the economy during last year's campaign and instead of the Ruto administration trying to slow the spread of cash in the economy, he is borrowing more and more. However, we need to forgive his stupidity because as a supposedly trained botanist, he thinks the El Nino rains will strengthen the Kenya schilling.
@ Geoffrey Ngara, I take it that you mean global elites want to create one global currency. Actually that would not be a bad idea,other than countries losing the autonomy to regulate their currency,and thus their economy. Economists have toyed with this idea for a while.Granted that there are some benefits,there are also drawbacks.Obviously the closest example we can draw from now is the EU,and their Euro.
One advantage of having a single global currency is that, there would be somewhat of a leveling of the global playing field , since nations like China could no longer use currency exchange as a means to make their goods cheaper on the global market. For a long time, China has manipulated its currency, undervaluing it, and thus making the price of its exports more competitive across the world. This has been a detriment to the economies of other nations. With one global currency, China would not be able to do this, nor would it have a reason to do so.
With one currency we could also avoid the hyperinflation we saw destroy Zimbabwe afew years ago,and forcing the country to adopt the American dollar... I guess we can say the american dollar is the defacto world currency...
Anyway, if it was easy to have one single global currency, it would have been done long time ago.Right? As always in such a gigantic task, the devil is in the details.
Well, when you value everything in US$ and B£, due to greed and wanna compete at the same level as the big boys, you definitely get burned!
Back in the 70’s, when a bread cost a few Kenyan cents, we valued our stuff in local currency, our functional currency, ksh,no greed of trying to screw everyone with outrageous get rich quick schemes, AND our Ksh was 7 to a $1.
What’s built on sand must come down crumbling soon or later!
Congo and others exporting pricey stuff haven't suffered inflation. Factor also the foreign currencies appreciation, oil prices up, Ukraine war, post COVID and pricey elections. Bado mapambano