Kenya Shilling Depreciates Again Versus US Dollar in Forex Markets Despite CBK Rates

 

The Kenya shilling has recorded another drop in its value in the forex markets in the last two days of the week between April 14 and April 20. Governor of the CBK Kamau Thugge (l). CBK maintains the Kenyan shilling remains stable.  The drop in the forex markets is indicative of an increased demand for dollars in the forest market, which is not reflected in the CBK indicative rates, which remained unchanged at KSh 131.43. Over various forex markets, the dollar's buying price ranged between KSh 133 and KSh 135, with the selling price ranging between KSh 135 to KSh 139. However, the latest CBK bulletin maintained that: "The Kenya Shilling remained stable against major international and regional currencies during the week ending April 18. It exchanged at KSh 131.37 per US dollar on April 18, compared to KSh 130.39 per US dollar on April 11." Dollar prices in the forex markets This comes after a recent report by TUKO.co.ke that the Kenya shilling suffered a loss against the dollar in the first two days of the trading week that began on April 15.  On Monday morning, April 15, the Kenya shilling traded at KSh 127.7 and closed the day at KSh 130.9. In a previous report, FXPesa's leading market analyst, Rufas Kamau, expressed concerns that since Kenya imports many goods, payments for these imports may take more dollars from circulation, leading to increased demand. "Imports will sooner or later scoop the new dollars in the markets, and we will be back to the same problem of dollar shortage. With US inflation rising to 3.5% in March, the US Federal Reserve will likely hold rates higher for longer, which could strengthen the dollar further. This is expected to help the dollar recover against the Kenya shilling," Kamau told Tuko.co.ke. The recent surge in prices of US dollars reflects an increased demand for the green bucks in the forex markets. 

by  Elijah Ntongai