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Kenya’s foreign exchange reserves dropped to a nearly 10-year low, creating consternation among people, businesses, and authorities. Presently, the reserves are enough to meet only four months’ import, which is critically low
Kenya’s foreign exchange reserves dropped to a nearly 10-year low, creating consternation among people, businesses, and authorities. Presently, the reserves are enough to meet only four months’ import, which is critically low.
Kenya’s commercial banks are running out of US dollars. As a result, some Kenyan firms have started sourcing dollars from neighbouring countries, especially Tanzania. The manufacturing sector is mostly affected by dollar shortages. It will also impact imports creating shortages of essential goods in the country. The shortage of US currency has made it difficult for manufacturers and general goods importers to meet their obligations.
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The Central Bank of Kenya (CBK) has directed commercial banks to ration dollars following the shortage of the currency and to protect reserves. Kenya is looking at plugging the currency shortages by seeking loans from the IMF.
