Kenya’s currency touched an all-time low of 150 shillings to the dollar on Monday, aggravating the economic condition in the deeply indebted east African country plagued by inflation.
The Kenyan shilling’s devaluation has increased in the last year, losing over 24% of its value against the US dollar.
The Central Bank of Kenya said that a dollar was selling for 150 shillings on Monday, but several commercial banks and bureaux de change had already reached this, or even greater, price in recent weeks.
According to Ken Gichinga, chief economist at research firm Mentoria Economics, this new low is mainly due to the strengthening of the US currency, because of the recent crisis in the Middle East “which is pushing investors towards safe havens” and the high yields on US Treasury bonds.
This depreciation is making imports more expensive and increasing Kenya’s debt, which stood at more than 10,100 billion shillings (64.4 billion euros) at the end of June, according to Treasury figures, or around two-thirds of gross domestic product.
Repaying this debt, particularly to China, is becoming increasingly costly for the government, which will also have to start repaying its debt in July.
