Ritesh Barot

The Kenya shilling-versus-US dollar topic is a favourite in East Africa. On January 25, the dollar was exchanging at Sh163.50. On April 13, it was Sh127. And earlier this month, the greenback was trading at Sh132. But as many rejoice the strengthening of the shilling, others query the measures being taken to avoid its weakening.

Kenya is witnessing a slow yet gradual upturn in the economy. The shilling strengthened against the dollar. Statistics show the unemployment is static. Manufacturing is set to see a revival after prolonged suffering. On the money markets, Nairobi Securities Exchange-listed firms are announcing year-end 2023 financial results. Some have declared momentous dividend payouts, triggering a rise in the NSE index after a long time.

In a bid to curb the growing inflation and stabilise the shilling, the Central Bank raised its benchmark interest rate to 13 per cent. This is the highest level since 2012. However, it is not surprising that the rates were increased so as to contain the inflation rates and reduce pressure on the Kenya Shilling. One of the key factors attributing to inflation is that Kenya is almost a net import nation and the shilling has depreciated more than expected against foreign currencies.