Following the shilling’s historic low against the dollar, which created the conditions for higher import costs and inflation, Kenyans are now facing more expensive household budgets.
Living expenses are anticipated to rise as a result of the local currency’s continued depreciation, which has brought the shilling’s year-to-date losses against the dollar to almost 9%. This will harm households who are already struggling with high fuel and food prices.
The latest round of shilling losses against the dollar coincides with a rise in global anxiety about oil inflationary pressures due to the conflict between Russia and Ukraine.
Analysts attribute the trend, among other things, to foreign investor portfolio outflows and the resolute strengthening of the dollar.
There are already worries in the market that the new dip will cause panic buying of the dollars at banks and forex bureaus and hoarding of dollars in a move that will worsen the crisis.