The Kenyan shilling hit a new low of the KES 128.6 mark against the US dollar, a significant drop indicating inflation and an increase in imported goods’ prices.
As per data from the Central Bank of Kenya (CBK), the average exchange rate for the shilling against the dollar was 128.5912.
However, retail dollar buyers had to pay up to KES 140 per unit in banking halls due to the high demand for the dollar. This, in turn, could lead to a higher cost of electricity and debt servicing distress for the country due to the weakening of the local currency.
The difference between the exchange rate set by CBK for the US dollar and the rate offered by banks and foreign exchange bureaus to customers has been growing. This is due to the high demand for the dollar, leading buyers to offer increasingly higher bids for the currency for both trading and hedging purposes.
Manufacturers have expressed concerns about the shortage of dollars, which is forcing them to purchase the currency at a premium compared to the official average exchange rate set by CBK. They warn that this situation could disrupt their manufacturing activities and lead to product shortages if not addressed.
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