For the past three years, consumers in the country have faced the challenge of a steadily increasing cost of living, primarily driven by soaring fuel and food prices resulting from high importation expenses.
The steep costs associated with importing essential commodities have been attributed to the depreciation of the local currency. As of late January 2024, the Kenyan shilling had depreciated by approximately 60 units against the US dollar, reaching a trading value of 161.
However, recent trends indicate a reversal of this trajectory, with the local currency now gaining value at a faster rate than its previous decline. This development is alleviating pressure on importers and leading to reduced commodity prices.
Since the onset of its appreciation in early February, the Kenyan shilling has strengthened by approximately 31 units, representing a significant 19% increase. Importers now require nearly Sh20 less to purchase a dollar for imports compared to just two months ago.
In contrast to its depreciation starting from early 2020, the shilling has now gained close to 30 units, marking a remarkable 30% appreciation. This recovery signifies a significant reversal, effectively recouping nearly half of the value it had lost over the past four years.
On Friday, the Central Bank of Kenya quoted the shilling at 130.35, indicating further stabilization and optimism regarding the currency’s performance.
