This archive report was first published on 18 July 2020.
On July 18, 2020, the Kenyan shilling hit an all-time low of KSh107.55 against the US dollar, amidst a rebound in the economy following the easing of movement restrictions by President Kenyatta.
The downward trend accelerated in the past week, with commercial banks quoting the shilling at 107.40 against the dollar on Thursday.
Analysts expect a surge in dollar demand from the energy sector and merchandise importers in the short term, driven by the gradual reopening of the economy.
Kenya's import-based economy means that importers will need more dollars as international trade returns, leading to a weakening shilling and higher prices for commodities.
Declining tea and horticulture exports, as well as a drop in diaspora remittances due to massive layoffs and disruptions in major economies, have also contributed to the pressure on the shilling.
Market observers await the next monetary policy meeting on July 29 to see measures taken to address the volatility in the local currency.
