A section of financial institutions bosses have predicted further depreciation of the Shilling come January 2024.
In a survey that was conducted by the Central Bank of Kenya (CBK) a section of 302 fielded CEOs explained that the Shilling depreciation would be caused by five factors including the country's maturing debt and persistent dollar demand by importers.
Notably, Kenya is set to begin paying off the Ksh500 billion Eurobond this month.
The decline in exports from Kenya and the reduced foreign direct investments were also highlighted as factors that could make the Shilling shed its value further.
Additionally, some of the CEOs forecasted that the dollar will continue to remain dominant heading into January as has been the trend over the last few months.
"Respondents expected the falling import bill to reduce pressure on the demand for hard currencies, in addition to expected support from the development partners and the steady diaspora remittances.
"However, some respondents expected some pressure on the exchange rate from maturing debt obligations, persistent dollar demand from importers, weak exports and foreign direct investments, and sustained US dollar strength," read the report in part.
Currently, the Shilling is trading at Ksh153.45 against the dollar, over Ksh20 more than it did in January 2023.
The depreciation of the Shilling has affected the economy and Kenyans considering that it has also led to the growth of the country's debt stock given that most of the debt was taken in dollars.
Notably, CBK Governor Kamau Thugge had earlier exuded confidence that the Shilling would stabilise in the coming months owing to various interventions undertaken by the government.
Together with Treasury CS Njuguna Ndung'u, the duo expressed that the Shilling would find its true value in due course.
The CS also explained that the government-to-government deal was also part of the policy interventions taken to ease pressure on the dollar.
