This archive report was first published on 10 September 2019.
Published on September 10, 2019, analysts have warned that the Kenyan shilling is at risk of depreciating in the short-term due to the Central Bank of Kenya's (CBK) demonetization of old Sh1,000 currency notes.
According to an analysis by Sterling Investment Bank, the removal of old Sh1,000 notes from circulation has led to an increase in demand for foreign currency, putting pressure on the local currency.
As a result, the Kenyan shilling has seen its value fall in the past month, with the exchange rate averaging 103.83 units to the US dollar as of last Friday.
On July 15, the local currency 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.
