A report published by the Treasury has revealed that the Kenyan shilling weakened by 21.9 per cent against the US Dollar between July - September 2023.
In the Quarterly Economic and Budgetary Review Report released on Thursday, the Treasury maintained that the Shilling remained stable despite experiencing headwinds.
Treasury also listed increased remittances from the diaspora, adequate dollar reserves, and an increase in export activity during the first quarter of the 2023/24 Financial Year as factors that contributed to the stabilisation of the shilling.
As of September 2023, the Kenyan Shilling was exchanging at Ksh146.8 against the dollar. This represented an increase of Ksh20 within a year, given that the dollar was exchanging at Ksh120.4 in September 2022.
"In comparison to Sub-Saharan African currencies, the volatility of the Kenyan Shilling exchange rate has remained relatively low. The Kenyan Shilling depreciated against the US Dollar at a rate of 21.9 per cent in the 12 months to September 2023 compared to 9.3 per cent in the 12 months to September 2022.
"The depreciation rate of the Kenya Shilling was lower than that of the Zambian Kwacha and Burundi Franc," read the report in part.
Additionally, the report detailed that the Shilling also weakened against other foreign currencies including the Sterling Pound and the Euro.
The Kenyan Shilling weakened by 33.4 per cent against the Sterling Pound and 31.5 per cent against the Euro in the 2023/2024 first quarter.
The weakening of the Shilling against the dollar has been attributed to the demand for foreign currency that is mostly used for the importation of goods such as oil.
Notably, the government settled on the government-to-government oil deal with Saudi Arabia in March in a bid to ease the pressure on the country's dollar reserves.
At the time, President William Ruto claimed that the fuel would be bought using the Kenyan shilling to ease forex pressures.
However, despite the move, the Shilling continued to weaken further, even hitting the Ksh150 mark in October.
Currently, the Kenyan shilling is pegged at Ksh152.30 against the dollar.
