Troubling times ahead as shilling weakens for a second year

Who will save us?

Kenya Shilling

The Kenya shilling has been on a seven month long losing streak, closing out the year at its weakest level of 113.09 per dollar on December 23.

The shilling has depreciated 3.5% to the dollar this year adding to a 7.8% loss last year. According to Bloomberg, the biggest monthly decline was in August when it weakened 1.3%, while July-September was the weakest quarter after depreciating 2.4%

“During the pandemic, the exchange rate acted as a shock absorber, reversing the previous trend of real effective exchange rate appreciation,” the International Monetary Fund said in a report released Thursday.

“This has helped absorb some of the impact of the Covid-19 shock, which reduced sources of foreign exchange for Kenya,” IMF concluded.

Loan disbursement

The depreciation comes only days after the International Monetary Fund approved a disbursement of Sh29billion for Kenya despite debt currently at Sh7.7 trillion.

The delivery of IMF funds brings total disbursements to Sh109billion out of a total Sh259billion available under the country’s program approved in April, the IMF said in a statement released on Friday.

"Kenyan authorities have kept up a strong commitment to their reform agenda in a challenging environment and are acting to cut debt vulnerabilities while supporting the economic recovery," the IMF said.

Officials have maintained careful control of government spending to limit the deficit and are taking steps to reform state-owned enterprises to limit pressure on the budget while protecting social programs, the fund said.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.

Eyewitness? Submit your stories now via social or:

Email: news@pulselive.co.ke

Recommended articles

Kenyans can now travel to 72 countries without a visa

Kenyans can now travel to 72 countries without a visa

Ini Edo posts new photos amid reports of welcoming a baby through surrogacy

Ini Edo posts new photos amid reports of welcoming a baby through surrogacy

Referee behind chaos at AFCON was rushed to hospital after match

Referee behind chaos at AFCON was rushed to hospital after match

Willy Paul wins against Diana Marua in court

Willy Paul wins against Diana Marua in court

KDF moves to forcibly acquire Sh 500M supermarket land in Nairobi

KDF moves to forcibly acquire Sh 500M supermarket land in Nairobi

Zuchu forced to apologize to fans after viral video raised eyebrows

Zuchu forced to apologize to fans after viral video raised eyebrows

Guardian Angel weds Esther Musila in private wedding [Photos]

Guardian Angel weds Esther Musila in private wedding [Photos]

I'm not in the US - Eddie Ndichu's photos explained

I'm not in the US - Eddie Ndichu's photos explained

Kenyans rate Kabogo's Karate skills [Video]

Kenyans rate Kabogo's Karate skills [Video]