Kenyan Shilling on Thursday traded at a record low of Ksh146.0412 against the US dollar, according to Central Bank of Kenya (CBK) data.
Further depreciation is a continuation of the local currency's decline since mid-last year, leading to soaring prices and costs of debt repayments.
EFG Hermes Research in July indicated that the shilling would hit Ksh150 against the dollar by December 2023, with some experts projecting that this might happen sooner.
Commercial banks and forex bureaus have adjusted the exchange rates, as government measures to curb the decline fail to meet expectations.
A spot check by Kenyans.co.ke indicates that commercial banks are quoting the greenback between Ksh152 to Ksh156, putting pressure on importers bringing in goods.
Kenya imports more than it exports and since the dollar is the main currency of trade, a weak shilling means manufacturers will spend more money while converting the local currency to buy goods.
For the month of July, Kenya's trade balance stood at $770.9 million (Ksh112 billion) according to CEIC, an International Statistical Institute (ISI) Emerging Markets Group Company.
Balance of Trade (BOT) is the difference between the value of a country's imports and exports for a given period of time.
The higher the deficit, the more expensive it will be to import goods including fuel and raw materials for industries and factories.
Kenya imports wheat, clothes, machinery, chemicals, fuel and clothes.
Shilling depreciation will also likely hit power consumers as Kenya Power factors in forex charges in their monthly bills.
Kenya's debt will also cross the Ksh11 trillion mark as most of it is dollar-denominated.
