The purchasing power of deposits made by Kenyans decreased by an estimated 2.36 percent in September, representing the lowest real interest return on long-term savings since May 2017 as a rise in living expenses devastated investors.
The 9.18% inflation rate in September, however, eliminated this return and decreased the purchasing power of depositors’ funds by an average of 2.36 percent.
Because the prices of a wide range of products and services have increased more quickly than profits on short-term investments, the savings will be able to purchase fewer goods and services in the market.
Despite CBK rate increases, inflation drops for the first time in nine months. September saw the lowest real interest rate since May.
Inflation has also hit workers hard, with real average earnings, or earnings adjusted for inflation, decreasing by 3.8 per cent to Sh718,800 in 2021.Half of the high-net-worth individuals cite inflation as a high concern, according to Standard Chartered’s Wealth Expectancy Report 2022.The report noted that 67 per cent of Kenyan investors plan to reduce their cash holdings to outpace inflation, compared to 61 per cent of the global investors that opted for this route to deal with inflation.