Shilling breaches Sh160 mark towards greenback

A weak shilling price the taxpayer an additional Sh65 billion month-to-month within the yr to June 2023. PHOTO | SHUTTERSTOCK

The Kenya shilling has hit a historic low towards the greenback, breaching the Sh160.23 mark on Monday and increasing a run of report weakening.

The depreciation comes regardless of the the Central Financial institution of Kenya (CBK) elevating rates of interest in December to counter weak point within the native foreign money.

Final month, the CBK shocked the market because it unexpectedly raised rates of interest by 200 foundation factors/ two %, lifting the Central Financial institution Charge to 12.5 % from 10.5 %. In its choice, the CBK Financial Coverage Committee-MPC famous that the change charge depreciation had continued to exert stress on home costs.

In response to CBK Governor Dr Kamau Thugge, the shilling had overshot its desired degree of depreciation following interventions to reset the overseas change market after what the apex financial institution alleged to have been the overvaluation of the native foreign money.

“We thought the shilling had been overvalued for fairly a while, there has since been vital changes and we now really feel that the shilling has depreciated sufficient and really might have overshot the speed required for equilibrium,” Dr Thugge mentioned on December 6.