- Historically, the Kenyan Shilling reached an all time high of 106.80 in October of 2011 and a record low of 60.35 in November of 2007
- Earlier in the day, the shilling hit a five year low of 104.7 against the greenback
The Kenya Shilling is still the most stable currency in Africa despite recent volatilities, according to global investment bank Renaissance Capital.
Speaking at the firm’s East Africa Investor Conference in Nairobi yesterday, the banks' global chief economist Charles Robertson said compared to other African currencies, the shilling has shown the most stability since 2016 despite persistent volatility in the global market.
‘’I agree with Central Bank of Kenya that the shilling’s stability is organic, otherwise, we could not have witnessed this kind of resilience,’’ Robertson said.
He said that although the shilling dropped by 10 basis points to trade 103.87 against the dollar on Wednesday compared to Tuesday, it has gained 3.13 per cent year- on – year. No other currency in the region marches this.
The South African rand has been the most vulnerable to global economic trends. Other countries whose currencies have weakened against the US dollar are Ghana, Zambia, South Africa, and Nigeria.
The Kenyan Shilling reached an all-time high of 106.80 in October, 2011 and a record low of 60.35 in November, 2007.
CBK governor Patrick Njoroge defended the shilling’s stability, saying the strength is supported purely by microeconomics.
Njoroge attributed the shilling’s strength to a drop in the current account deficit, which stands at 4.2 per cent of GDP, down from 10.4 per cent four years ago.
He dismissed claims that the shilling is managed, saying the country has a flexible exchange rate policy.
‘’I want to emphasis that we have a flexible exchange rate policy. We only intervene to minimise volatility,’’ Njoroge said.
He, however, said the shilling continues to exhibit vulnerability to the US dollar as effects of heavy liquidity outweigh the upside from an improved balance of payment position and steady diaspora remittances.
Earlier in the day, the shilling hit a five year low of 104.7 against the greenback as mapped by the Google Currency tracker at 8.30 am before recovering to a day’s mean of 103.86.
A money market analyst Jared Muge told the Star that the Shilling is suffering from double effect of excess liquidity in the market as people rush to spend and exchange old Sh1,000 notes ahead of September 30 deadline and high demand for dollar by importers.
‘‘Expect demonetisation effects and importers rush to stock dollars as Saudi oil crisis persist to weigh down the shilling in short term,’’ Muge said.