The Kenya shilling on Monday July 13, 2015 hit a new low in a little over three years against the dollar.
Reaching KSh 103 to the dollar at some point on Monday, the shilling is trading at a level last seen in October 2011, according to a Reuters report.
Some of the reasons for this outlined in the report include:
1. The Kenya shilling is hurt by demand for the USD from energy and manufacturing sectors.
A trader at a Nairobi-based commercial bank is quoted suggesting that a number of orders from the energy and manufacturing sectors to buy dollars came through late on Friday July 10, 2015 (when the shilling was trading at about KSh 101.85) , but were processed on Monday morning, putting pressure on the local currency.
2. A wide current account deficit is again indicated in the report to keep the shilling under pressure in coming days.
3. Low tourism returns due to dwindling visitor numbers following a spate of al Shabaab terrorist attacks is also blamed.
The interviewed trader said that the Central Bank of Kenya will most likely intervene and help boost the Kenya Shilling by selling US Dollars.
source: Tuko