President William Ruto’s economic adviser, David Ndii, has argued that a weak shilling is good for the economy since it has helped reduce imports while promoting local manufacturing. David Ndii sparked reactions with his argument on the shilling. Why David Ndii argues weak shilling is good To support his argument, Ndii shared infographics showing Kenya’s trade deficit was narrowing. His data indicated that the value of Kenya’s imports fell from $19.6 billion (KSh 3.2 trillion) in October 2022 to $17.1 billion (KSh 2.9 trillion) in October 2023. During the period under review, the country’s trade deficit reduced from $10.7 billion (KSh 1.75 trillion) to $8.9 billion (KSh 1.46 trillion). “The exchange rate is doing its job. Your noise is of no consequence. Your shopping is,” Ndii posted on his X handle on Wednesday, January 24. In another post, Ndii noted that Kenyans were cutting expensive imports, hence promoting local manufacturing under the Buy Kenya, Build Kenya strategy. “Because of substituting expensive imports that we can no longer afford with cheaper domestically produced goods. Weak shilling is how you do that Buy Kenya Build Kenya thing you’ve been calling for,” he said while replying to a Kenyan who questioned the shilling’s freefall. How did Kenyans react? Below are some of the sampled tweets: What’s the current exchange rate? According to official exchange rates by the Central Bank of Kenya (CBK), the shilling traded at 160.19 against the greenback on Wednesday, January 24, down from 161.36 on Tuesday, January 23. The uncommon upswing represented a notable departure from a prolonged decline, during which the local currency experienced a decrease of more than 27% in value. Central Bank of Kenya governor Kamau Thugge said the shilling was overvalued by between 20 and 25% and accused retired president Uhuru Kenyatta’s government of using forex reserves to create an artificially strong currency.
BY TUKO NEWS