NAIROBI, Kenya, May 28 – The National Treasury has been urged to take necessary measures to stall the further depreciation of the Kenyan shilling.
Senate Finance, Budget and Commerce committee Chairman Billow Kerrow said the rate at which the shilling was dropping was of concern as it was negatively impacting businesses and livelihoods.
This comes as the shilling continued to weaken in Thursday’s trading session to trade between 98.75 and 98.95 levels.
“It’s really affecting Kenyans not just those who are paying fees, not just those who are importing, it’s really affecting the cost of living in the country adversely, “Kerrow added.
Kerrow is expected to respond to the matter in the next two weeks.
Senator Mutula Kilonzo Jnr claimed the shilling crisis had been orchestrated to coincide with the fact that the Central Bank was yet to appoint a new Governor.
He sought an explanation over the status of the proposed Central Bank Act which should have been enacted immediately after the implementation of the new constitution claiming it could prevent the crisis.
The move comes as the Monetary Policy Committee (MPC) forwarded their meeting four months earlier to June 9 owing to the depreciating shilling.
Money market experts have also raised concerns that the weakening shilling is pulling out foreign investors at the Nairobi Securities Exchange (NSE) that has lost 5.5 percent in the last five months as measured by the NSE 20-Share index.
Pan Africa Asset Management Senior Portfolio Manager Jonathan Wakahe says key among investors’ concerns are the tumbling shilling which erodes the overall returns earned by foreign investors.
Other concerns include rising inflation and the lack of clear policy direction.
Wakahe says the market appears headed even lower as even local investors continue to trim their equity holdings.
Commercial Bank of Africa’s (CBA) Treasury Department says the shilling weakened further today with the US dollar-Kenyan shilling currency pair riding towards 99 levels with expectations of the shilling to weaken further ahead of the MPC meeting.
“We expect the committee to hike Central Bank Rate by 300bps in a bid to ease demand for the dollar, “CBA Treasury Department said.