The Kenya Shilling has been steadily falling against most currencies, including global leaders such as the US Dollar and regional currencies such as the Uganda and Tanzania Shillings.
For a long time, the Uganda Shilling traded at an average of 30 to the Kenya Shilling, and each US Dollar required only 100 Kenya Shillings.
According to the central banks of Uganda and Kenya, the Kenyan currency is now worth only 25.6 Uganda Shillings, while the US dollar is worth 146 Kenya Shillings.
The Kenya Shilling has also depreciated against the Tanzania Shilling, falling to 17.26 from 18.2 at the start of the year, and against the Rwanda Franc, falling to 8.26 from 8.7.
According to the Ministry of Finance, Planning, and Economic Development, all EAC partner countries’ currencies depreciated against the US dollar, with the exception of Uganda, which appreciated by 0.6%.
Burundi had the highest depreciation rate of 3.8%, followed by Rwanda, Kenya, and Tanzania, which had rates of 2.2%, 1.8%, and 0.3%, respectively.
The depreciation trend has defied all forecasts, including one made by President William Ruto, who predicted that the Shilling would regain parity with the US dollar in April.
Foreign exchange bureaus in Kampala report declining activity on the Kenya Shilling counter due to its unattractiveness to investors, while the spread between selling and buying rates has narrowed to 0.06 Shillings.
Kenya saw a decrease in investment inflows in 2022, while traders from Uganda, Rwanda, the Democratic Republic of the Congo, and South Sudan shifted their imports and exports to Tanzanian ports, fearing election violence in Kenya.
The exercise was peaceful, and there was a return of business and investment to the country, albeit for a short time as the opposition quickly launched violent protests. Before preparing to step down as President, Uhuru Kenyatta eliminated fuel subsidies, paving the way for sharp price increases in the products.
According to www.globalpetrolprices.com, Kenya currently has the highest petrol and diesel prices in the region.
