The Kenyan shilling hit a new low of KES 127.08 mark against the US dollar, a significant drop from the 123.42 Kenya shillings per dollar recorded at the beginning of the year.
The local currency experienced its lowest point ever against the dollar, which will likely result in increased costs for imports, electricity, and debt servicing in the country.
The devaluation of the local currency has been attributed to the aggressive increase in US interest rates aimed at controlling inflation. This has resulted in the strengthening of the dollar and a persistent scarcity in the local market that began last year.
Since mid-2021, the local currency has been in a weakened position due to a combination of inadequate inflows and high demand for the dollar. Over a 12-month period ending in December 2022, the shilling depreciated by 9.0 per cent, which has resulted in a rise in living expenses, especially for households already affected by elevated food and fuel prices.
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