Firming Shilling gives Kenyans hope
There is now some good news for Kenyans as the Shilling continue to steadily strengthen against US dollar and other currencies. The hardened muscle of the Shilling has majorly been supported by increased inflow of foreign currencies taking the pressure away from the Shilling. This has drawn recognition from senior financial policy makers like Central Bank of Kenya Governor Patrick Njoroge and National Treasury Cabinet Secretary Henry Rotich, who have committed to ensure more currency flow in rather than out of the country.
On Friday, for instance, the Shilling traded at an average of Ksh100.55 compared to average of Ksh100.70 on the preceding day. Stakeholders in the banking sector have applaud the increasing inflow of foreign currencies to support the Shilling. They have projected existence of a cheaper global market if the country continues to keep a massive reserve of foreign currencies.
According to them, the calm political temperature that has prevailed in the country since the famous handshake between President Uhuru Kenyatta and opposition leader Raila Odinga in March, has seen more foreign direct investors fly into the country carrying along their currencies.
The country has also registered increased production and sale of exports such as tea, coffee and horticulture meaning more earnings in foreign currencies. This is besides increased diaspora remittance that has topped up the foreign currency reserves. According to the Head of Research at Sterling Capital Renaldo D’Souza, diaspora remittances had increased to Sh15.5 billion as of June 2018 compared to Sh2.6 billion in the same period last year.
As to whether the strengthening Shilling will have a major impact on citizens’ lives, especially in the wake of souring prices of fuel, housing, electricity among other basic commodities, commentators have pleaded for hope. They have continued to predict a positive effect especially on imported products.
Kenya being majorly an importing country, they have said a stronger Shilling will mean prices of critical products used in manufacturing will go down hence low cost of living. “A strong shilling makes imports cheaper. So, consuming a product that has import content is cheaper,” says Kenya Bankers Association (KBA) Chief Executive Habil Olaka