Foreign Exchange Down

10%

Kenya Shilling at new low while de cit narrows

The Shilling slipped to a fresh low against the dollar, trading at 124.92 from 124.62 at last week’s close amid sustained pressure from importers to meet their obligations and broader dollar strengthening. Shortages of foreign currency in Kenya have continued to weigh on business growth in the country. Despite such strains, the current account de cit was lower than forecast last year, coming in at 4.9% of GDP compared to 5.4% in 2021 on the back of increased exports and diaspora remittances towards the end of the year. The central bank had expected the de cit to hit 5.6% in 2022. With dollar demand continuing to outweigh supply, we expect the Shilling to remain under pressure in the coming days.