The Kenyan Shilling on Thursday’s session weakened to a five year low crossing the Ksh.105 mark against the US Dollar mainly driven by concerns over the economic impact of covid-19.
Adverse effects have been felt on both Kenya’s imports and exports, with investors worried about the worsening situation as covid-19 hits.
“The local clients are on the same page with Global Clients… Everyone wants cash, and they want that cash in dollars,” noted a trader interviewed by Reuters.
Investors expect the twin deficits to take a turn for the worse against earlier indications on stability as Kenya’s foreign currency flows dry up from lower commodity exports, lower tourism earnings, and muted diaspora remittances.
Since the outbreak, the shilling had weakened from 102 at the start of the month when the Central Bank of Kenya stated its ambitions to purchase US dollars so to increase its foreign exchange rates.
Kenya, through the Ministry of Health, has so far confirmed seven cases of the virus as of Wednesday.
On Monday, March 23, this year, the Central Bank of Kenya is expected to be holding its bi-monthly monetary policy.
Central Banks in the region have had varying responses to the impending currency crises with Uganda, for instance, selling dollars to cover the shilling.