The Kenyan shilling hit a new low of KES 126 mark against the US dollar compared to KES 124.9 last week as pressure mounts on Treasury, further complicating debt servicing obligations, even as forex reserves drop further.
While the import of this is a significant increase in the prices of imported goods such as petroleum and crude palm oil alongside other capital goods, the Central Bank of Kenya (CBK) is confident, calling the shilling stable.
“The Kenya shilling remained stable against major international and regional currencies during the week ending February 16. It exchanged at KES 125.52 per US dollar on February 16, compared to KES 124.98 per US dollar on February 9,” CBK in its weekly bulletin.
CBK further stated that usable foreign exchange reserves remained adequate at $6.9 billion, equivalent to 3.84 months of import cover, meeting the CBK’s statutory requirement to maintain at least four months of import cover.
“This meets the CBK’s statutory requirement to endeavour to maintain at least 4 months of import cover,” CBK said in its latest weekly bulletin.
This comes despite the third consecutive decline in inflation rates in the country in a bid to ease the cost of living pressure on households.
Currently, the Kenya National Bureau of Statistics recorded an inflation rate of 9% in January, which was attributed to a slowdown in the rate of food inflation after the food and non-alcoholic beverages index recorded a 12.8 per cent rise year over year for the month.
Read also; Kenyan Shilling Declines Further Hitting a Record Low of KES 124 Against the Dollar.
