By Enyichukwu Enemanna
The Kenya’s official currency, shilling on Monday dropped to a new all-time low, exchanging 150 to the dollar, putting more pressure on the economy where the people have been confronted by growing inflation amidst raft of new taxes by the government.
The shilling has been in decline for several years and plunged by almost 24 percent over the past year.
Kenya has been dealing with pressure from high debt profile and dwindling government revenues.
According to data from the Central Bank of Kenya, the dollar was selling at over 150 shillings, although some commercial banks and foreign exchange bureaux have been trading it at that level or higher in recent weeks.
Ken Gichinga, chief economist at Mentoria Economics, told AFP the exchange rate reflected the strengthening of the dollar during the Middle East crisis “which is pushing investors to safe-haven assets”, as well as high US treasury yields.
Kenya had accumulated more than 10.1 trillion shillings ($67 billion) in debt by the end of June, according to Treasury figures, equivalent to around two-thirds of gross domestic product.
The cost of servicing the debt, mainly to China, has increased as Kenya’s currency has slumped, and the government also has a $2 billion eurobond falling due in June next year.
President William Ruto earlier this year introduced a range of new and increased taxes to help generate revenue.
Ruto had during last year’s election promised to help ease the financial hardship of ordinary Kenyans, a promise he has failed to keep.
Inflation has remained high, at an annual rate of 6.8 percent in September, with food and fuel prices still on the rise.
