Nairobi is among ten cities whose local currencies have significantly depreciated over the past year, a new report has revealed.
According to the Worldwide Cost of Living, 2023, report published by the United Kingdom's research-based organisation Economist Intelligence Unit (EIU), Nairobi dropped 33 slots from 108 to its current position of 141.
The report, which surveyed 173 cities worldwide, based its ranking on converting local currency prices of basic goods into the United States dollar as the common currency.
The countries whose currency weakened against the dollar dropped in rankings while those whose currencies strengthened increased in rankings.
According to the report, Nairobi dropped due to the weakening of the Kenyan currency as well as a slow post-pandemic recovery period.
"A weaker currency, slow post-pandemic recovery and subdued consumer demand have led these cities to fall in the rankings," read part of the report.
Currently, a dollar goes for Ksh153, meaning that the government pays more for every dollar borrowed.
This creates a ripple effect in the cost of living as basic items such as fuel prices, cost of electricity and food products will hike.
This has raised concerns over President William Ruto's administration's ability to pull the country's economy out of the crisis.
Recently, National Treasury Principal Secretary Chris Kiptoo explained that the weakening of the Kenyan shilling was largely occasioned by external factors, which the country had little control over.
"We have a situation where Commercial Bank reserves of the dollar are higher than what we have in the public coffers," Kiptoo told the National Assembly's Public Investments Committee.
"However, we are rolling out measures to create more confidence in the forex market."
He also opined that the weakening shilling was not entirely bad, as a section of Kenyans in the export trade could capitalise on it by investing more in foreign exchange earners such as tourism.
