Citigroup Inc. a New York-based global investment bank on Monday noted that the downward spiral of the Shilling would not scare away investors.
The institution which controls over 200 million accounts for customers and investors in more than 160 countries explained that the weak shilling was not a top concern for foreign investors.
George Asante, Citi’s head of markets for Sub-Saharan Africa, in an interview with Bloomberg, explained that Kenya could draw greater foreign investments despite the shilling trading at a record low against the dollar and other major currencies.
“Countries where we’ve seen significant FX adjustments are clear winners from an investment perspective,” Asante noted adding Angola and Nigeria among the countries to benefit after their currency’s decline.
“All these from a local market perspective offer opportunities.”
Asante’s statement was made two days before the shilling hit an all-time low of 145.261 against the dollar.
The shilling decline was attributed to manufacturers and energy traders scrambling for dollars creating scarcity.
Bloomberg estimates that in the African continent, Nigeria, Angola and Kenya’s currencies have been the worst hit in 2023.
The Nigeria naira has lost 40 per cent of its value against the dollar while over the same period, Angola’s kwanza registered a 39 per cent depreciation.
Kenya on the other hand has lost 15 per cent of its value against the dollar over the same period of time.
President William Ruto in April this year assured Kenyans that his government had put in measures to ease the pressure on the weakening shilling.
At the time, he promised that in a few month's time, the shilling would be trading against the dollar at 115.
David Ndii, Chair of the Presidential Council of Economic Advisors, on Sunday, August 27, revealed that his team had warned Ruto of making such pronouncements in future.
“The exchange rate is not a policy target. It will settle where the market clears, that is, demand equals supply,” Ndii told Kenyans worried about the weak shilling.
