Central Bank of Kenya Building, Nairobi | Photo Courtesy
NAIROBI, Kenya, Jan 16-The Kenya shilling has crossed the 160 mark in the new exchange rates released by the Central Bank of Kenya (CBK) in the deepest plunge ever witnessed.
Figures posted on the official CBK website cap the exchange rates of the shillings against the dollar at sh 160.18 up from sh 157 last week.
The depreciation of the local unit against the dollar has been on a steady rise recently, with experts projecting it could soon surpass its current exchange rates.
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This despite CBK’s Monetary Policy Committee (MPC) hiking the CBK rate from 10.5 percent to 12.5 percent to contain the Kenyan shilling’s depreciation against major global currencies such as the American Dollar, among others.
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The Kenya shilling has been under immense pressure from the American greenback due to high demand.
“The MPC therefore concluded that there is need to adjust the monetary policy stance to address the pressures on the exchange rate and mitigate second round effects including from global prices,” CBK said in a statement.
“This will ensure that inflationary expectations remain anchored, while setting inflation on a firm downward path towards the 5.0 percent mid-point of the target range.”
In an interview on December, President William Ruto had accused the previous regime for maintaining an artificial exchange rate. He further fingered Uhuru’s Regime for “selling Kenya’s foreign reserves” to “subsidize the dollar.”
“In Kenya we were maintaining an artificial exchange rate …… using our foreign exchange reserves. The government of Kenya spend USD2.6 billion in supporting Kenyan shilling so that it doesn’t go to its actual exchange rate,” Ruto said in a media interview in statehouse.
The head of state is also quoted to have said that the government to government oil deal had put a brake to the free fall of Kenya currency against the dollar. He also added the increase in interest in US Federal Reserves added to the woes that the shilling is facing.
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