A lot of the commercial banks in the capital are buying the dollar at an average of Sh98 and selling it at Sh107 and more signalling a dangerously volatile trend
The spike, expertd say is triggered by the Central Bank of Kenya (CBK), which has been actively buying dollars, worth Sh40 billion, from the Kenyan market just in case worst comes to worst. “Most of the demand is coming from the CBK and the law of demand and supply is what has seen the Kenyan shilling weaken,” a currency dealer at a bank on Kimathi Street told journalists.
This is the second week running the shilling is losing ground against the US dollar and experts say it could get worse.
A weak Kenyan shilling would mean increased cost of imports, further threatening the already suffering Kenyan economy since we are an importing country and Kenya pays for its imports using the dollar.
The CBK had announced that it would be cushion buying Sh40 billion ($400 million) between March and June this year. That is Sh1 billion per month for security.
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