This archive report was first published on 9 September 2019.
Published on September 9, 2019, analysts at Sterling Investment Bank have warned that the Kenyan shilling may depreciate in the short-term due to increased demand for foreign currency.
The warning comes as the Central Bank of Kenya (CBK) removal of old Sh1,000 currency notes from circulation draws to a close.
According to Sterling Investment Bank, Kenyans are seeking to hold more of foreign currency, which has led to a significant increase in dollar demand.
As a result, the value of the Kenyan shilling has fallen in the past month, with the local currency now exchangeable at an average of 103.83 units to the US dollar.
On July 15, the Kenyan shilling was exchangeable with the US currency at an average of 102.95 units, but it has since fallen to 103 units and touched 104 units at some point.
“The biggest risk to the stability of the local currency in the short-term in our view is demonetisation which has led to increased demand for foreign currency,” said Sterling Investment Bank in its latest report.
