NAIROBI, Oct. 23 (Xinhua) — The Kenyan shilling plunged to a historic low of 150 against the U.S. dollar Monday, piling pressure on the country’s dwindling foreign exchange reserves and making imports expensive amid rising inflation.
The Central Bank of Kenya (CBK) placed the local unit to the dollar at 149.94 in Monday trading, a 24 percent decline year-to-date.
The forex reserves on Oct. 19 stood at a new low of 6.83 billion U.S. dollars, which covered only 3.67 months’ worth of imports, a fall from 7.29 billion dollars a year ago.
The central bank, in its latest financial sector stability report released on Oct. 15, blamed the decline of the local currency on the “rapid monetary policy tightening in advanced economies that pushed global interest rates sky-high, triggering the flight of investors to quality currencies like the dollars.”
CBK projected that recovery in exports, resolution of Russian-Ukraine conflict, pausing of global monetary policy tightening, rise in diaspora remittances, prudent monetary policy and stable import bill are expected to support the local currency to regain stability.
According to the apex bank, the local currency has depreciated over time against major international and regional currencies, exchanging against the sterling pound at a new low of 182.08 shillings and euro at 158.54 shillings Monday.
The country’s inflation rose to 6.8 percent in September, the first increase since May, from 6.7 percent in August.
