US-Kenya Trade Talks: Trump Administration Warns Kenya Against Manipulating the Shilling
Manipulation of the shilling against the dollar could threaten the ongoing trade talks between Kenya and the US.
As part of the pre-conditions in the ongoing negotiations for a free trade agreement (FTA) between the two countries, the US has warned Kenya against manipulating the shilling and wants it to allow market forces to influence the exchange rates.
“Ensure that Kenya avoids manipulating exchange rates in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage,” says the US in a raft of conditions.
Kenya and the US formally commenced discussions in July and hope to strike a trade agreement that will serve as a model for future trade pacts with other African nations.
Kenya is seeking to wrap up the pact before the expiry of the Africa Growth and Opportunity Act (AGOA) in 2025. AGOA gives Kenya and several other sub-Saharan African countries duty-free access to the US for over 6,000 products.
The International Monetary Fund (IMF) in 2018 accused Kenya of overvaluing the shilling by 17.5 percent but Central Bank of Kenya (CBK) governor Patrick Njoroge refuted these claims.
“Our own calculations support the view that there is no fundamental misalignment reflected in our exchange rate and we have also retaliated that the Kenya shilling reflects the currency’s true value,” said Njoroge.
“We let the market flexibly drive the price of foreign currency. The only thing we do is to intervene in order to minimize volatility.”
He said IMF used a methodology called EBA Lite, which is designed for advanced economies to arrive at its conclusion.
“We are the ones who are being used as a guinea pig in terms of EBA Lite methodology. That is something that obviously we do not agree with,” he said.
Besides manipulation of the exchange rate, the US has issued other conditions to Kenya including support for Israel’s political and commercial interests.
Comments
Divide and rule. that is how…
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Divide and rule. that is how Trump will oppress other countries. How can little Kenya oppose such demands? Abandon these talks and go back to AGOA.
Nice Kenya. Make Kenya Great…
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Nice Kenya. Make Kenya Great Again! Keep manipulating the Shilling$$$
Kenya should reject these…
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Kenya should reject these negotiations. Nothing in draft is advantage Kenya. Everything is all about American and the Trump Administration. These negotiations should be halted until the new US Administration takes office. I suggest involving US Diaspora in these negotiations.
We've been supporting Israel…
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We've been supporting Israel since its inception. Israel support is the black mail western nation use against African countries ever since the cold war. Remember the Entebbe raid, they used our landing strip to attack Uganda. So much for "I'm my brother's keeper". The trade noise you hear going on is just a game of paka na Panya. The trade alliance we need is a single commerce command for all of Africa resources against the other nations- as single entity. US do protect herself with Trump tariffs and America first but when it comes to us and our sweat and resources, it becomes open market and free market. Open market and free markets to who? If it's all about free market, why did we need AGO? Shouldn't we have been sending stuff to US anyway?
The IMF structural…
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In reply to We've been supporting Israel… by Mwororo (not verified)
The IMF structural adjustment program is 1981 is the one that made Kenya to devalue its Monies, from Ksh10 to Ksh15. Under Jomo between 1973 and 1978 the Schilling went from 7 to 7.50. All done under the pretences of cheaper exports.
The downward spiral had begun. Greed and Corruption has brought us to Ksh 105.
Even a German said in the then VOK in 1981 that Kenya should go ahead and devalue;neo-colonilism.
Our leaders continue to betray us but Aluta Continua; we have finally woken up, Africans are waking up.
Correction to Wahoro:
I witnessed, from outside our house in Huruma, one of the two Isreali C130 planes, trying to land at now Moi Air Base. It couldn't and went to the then Embakasi Airport for refueling after the mission.
USA going down n Chinese…
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USA going down n Chinese taking over as the supapawas making stato unconfortable.Stato will b history,they became supapawas instead of bin smart to develop every continent strategically they failed terribly with NGOs/aid/war/poverty/changing gavaments so sasa they are peeing on their pants when they see kenya bin smart n doing what the western world have always done with their currency??bravo kenya
CHINA HAS DONE IT OVER AND…
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CHINA HAS DONE IT OVER AND OVER AGAIN.
WHAT HAS USA DONE?
THE FIGHT IS BETWEEN USA AND CHINA.
USA SHOULD FOCUS ON CHINA AND NOT IN AFRICAN NATIONS DOING WHAT CHINA DOES ,BUT THIS IS THE SECOND SCRABBLE FOR AFRICA.
OUR POLITICIANS ARE SELLING US WITH NO SHAME .BORA THEIR BELLIES GET BIGGER.
@Kora Kanini, yes there is…
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@Kora Kanini, yes there is scramble for Africa but this time " buyer be aware", there will be rude awakening its not business as usual. Black man is awake. The mighty gun will not be useful, this time spiritual strength will also be at play. My opinion, the black man will win this time around.
We are all watching and waiting for full revelation and restoration.
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