Kenya is grappling with a severe dollar shortage, leaving manufacturers and entrepreneurs who rely on imports struggling to access the US currency.
According to the Kenya Association of Manufacturers (KAM), importers are buying the dollar at more than Sh. 120, compared to the Central Bank of Kenya's official exchange rate of 116.81 units.
“Although the formally quoted exchange rate for the US dollar in the market is hovering around Sh. 115-116, none of our members can access currency at that price in the market. The real market price is now above Sh. 120,” KAM chairman Mucai Kunyiha said in a statement.
The volatility in the exchange rate market has slowed dollar trading among banks, further exacerbating the scarcity of the US currency.
“Banks are unable to trade dollars between themselves, further exacerbating the supply constraints. The risk here is that we are creating a parallel shadow market with unwanted consequences,” Kunyiha added.
