Kenya's weakening shilling trend against USD

Country's debt increases by Sh40b any time the shilling drops a unit against US dollar.

by WILLIAM WANYOIKE

News06 April 2022 - 11:58

In Summary

•PKF termed ballooning debt as worrisome but maintained that it can be sustainable if the economy grows 7-10 per cent. It has predicted a growth of five per cent in the current financial year ending June 30.

•PKF CEO Alpesh Vadher told the Star that the country will have no option but to restructure some of its external debt.

A weak shilling is likely to increase Kenya's debt obligation by more than Sh500 billion by December if the current depreciation trend prevails.

On Monday, financial consulting firm, PKF projected the shilling to trade as high as 120 units against the US dollar by end of the year. It is currently trading at 115.10.

The devaluation of the country's currency has already pushed up its obligation on external debt by Sh271 billion since June last year, despite dropping to $36.9 billion from $37.06 billion.

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