- On December 17, 2023, President William Ruto explained why the Kenyan shilling weakened against the US dollar.
- Ruto said the shilling was initially stable because the government was maintaining an artificial exchange rate of the local currency against the dollar.
Image: FILE
Mbeere North Member of Parliament Geoffrey Ruku has claimed that from April, Kenyans will see a decline in the price of the dollar.
Speaking on Thursday, Ruku said that the price of the dollar will come down because of the policies that the Kenya Kwanza government has put in place.
“We will start seeing a decline of the price of the dollar from April, May, and June, because of the policies which Kenya Kwanza government has put in place to ensure we get it right as far as production is concerned,” he said.
On December 17, 2023, President William Ruto explained why the Kenyan shilling weakened against the US dollar.
Ruto said the shilling was initially stable because the government was maintaining an artificial exchange rate of the local currency against the dollar.
"The issue of the exchange rate is a factor of many aspects. I came into office when there was a fluid of activities such as COVID-19, drought and others that combined to change the situation globally," he said.
"In Kenya, we were maintaining an artificial rate. We were maintaining it using our foreign exchange reserves. The Government of Kenya used 2.6 billion dollars in supporting the Kenyan shillings so that it does not go to the actual rate."
According to Sanlam, the Kenyan shilling is expected to start strengthening in the last quarter of this financial year as debt pressure, negative geopolitics and fuel prices stabilise.
The 2024 outlook by the diversified financial firm, says international investors' eyes are on Kenya as it arranges to clear the inaugural Eurobond of $2 billion a decade ago.
"As uncertainties around Kenya’s repayment of its 2024 Eurobond ease, coupled with less restrictive monetary policy globally, this could see improved sentiment from foreign investors towards Kenyan Equities trading at historically low valuations,'' Sanlam chief investment officer Shritesh Nanji said.
"We expect this to lift pressure on the shilling that has since shed 21 percent against the US Dollar in just a year.''