Kenya Shilling Depreciates To 9 Year Low Against Dollar Amid Coronavirus Pandemic

Shilling Ends Marginally Lower Against US Dollar at 108.38

The Kenyan shilling depreciated nearly 1 per cent to a record a 9-year low week ending April 24, 2020.

The currency exchanged at Kshs 107.2, from Kshs 106.2 recorded the previous week. 

Central Bank of Kenya said the currency eased against major international and regional currencies due to build up in dollar demand on account of reduced foreign currency inflows.

“This is a 9-year low record with the last intra-day low record seen in October 11th 2011 when the Kenya Shilling traded at Kshs 107.0 against the US Dollar. On a YTD basis, the shilling has depreciated by 5.8% against the dollar, in comparison to the 0.5% appreciation in 2019,” Analysts at Cytonn Investments say.

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“The shilling has remained under pressure since mid-March when the country reported its first case of Covid-19. Foreign investor outflows have increased and CBK has used its forex reserves in a bid to support the shilling,” AIB Capital said in a note.

On Friday, the CBK reported a total of $7858 million (KSh787 billion) equivalent of 4.75 months of import cover compared to KSh791.3 billion able to sustain 4.78 months of imports the previous week.

“This meets the CBK’s statutory requirement to endeavor to maintain at least 4 months of import cover, and the EAC region’s convergence criteria of 4.5 months of import cover,” CBK said.

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