dwindling reserves

Is Kenya shilling set for a big slide amid FX slump?

By Herald Onyango

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Posted on December 19, 2022 09:51

© FILE PHOTO: Kenya Central Bank Governor Patrick Njoroge addresses a news conference at the Central Bank of Kenya (CBK) headquarters in Nairobi, Kenya July 25, 2019. REUTERS — FILE PHOTO: Kenya Central Bank Governor Patrick Njoroge addresses a news conference at the Central Bank of Kenya (CBK) headquarters in Nairobi, Kenya July 25, 2019. REUTERS

Kenya’s maturing debt, tightening monetary policies by big economies, and ballooning import bills will force the East African country to spend more of its forex reserves (FX) to meet financial obligations in the external market, most of which are dollar-denominated transactions.

This combination of factors points out that the limited FX might face a further slump, which will continue crushing down the value of the Kenya shilling against the dollar, indicating tougher times for the importers and commercial banks.

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