This archive report was first published on 20 August 2020.
On August 18th, 2020, the Kenyan Shilling touched a new record low of 108.6 against the US Dollar, a trend that continued on Wednesday with a 0.14% depreciation to 108.55.
The local unit's decline is attributed to several factors, including Safaricom's decision to dump the local currency and turn to the greenback ahead of its record final dividend payout at the end of the month.
The firm is expected to make dividend payments worth more than KSh 56 billion to shareholders, with the majority going to foreign equity owners who will be paid in hard currency.
Additionally, demand for dollars from importers increased as many businesses returned to activity following weeks of closure due to lockdown measures imposed to curb the pandemic.
The government's decision to lift a five-month ban on imports of second-hand clothes and shoes on August 14th has also contributed to the currency's decline.
According to the Central Bank of Kenya, the mean rate for the Kenya Shilling is 108.55, with buying and selling rates at 108.4588 and 108.6588, respectively.
Trading Economics, a New York-based online platform, estimates the local unit to trade at 108.51 by the end of the quarter and 109.29 in 12 months.
