The fall in the value of the shilling is deepening Kenya’s economic crisis. Local currency quoted by the commercial banks stood at 119 this week against the euro, down from an average of Sh128 in February.
The fall in the value of the shilling is deepening Kenya’s economic crisis. Local currency quoted by the commercial banks stood at 119 this week against the euro, down from an average of Sh128 in February. The weak shilling has left imports of farm inputs such as fertilizer and chemicals costlier.
Kenya’s horticulture exports are paid in Euros that have lost ground against the Kenyan shilling in the past six months
The fluctuation in the currency is expected to hit foreign exchange earnings. According to the official statistics, almost 72 percent of Kenya’s horticulture exports are done in euros and 25 percent in the British Pound. The Kenyan shilling has remained weak against the dollar, retailing at Sh118 against the greenback.
The drop in the value of the currency means that the earnings of the flower exporters get cut by at least an average of Sh10 compared to the first half of the year. Richard Fernandez, chairman of the Kenya Flower Council said that the profit margins are being squeezed due to the falling dollar which has impacted sales and the cost of production as well.
Fuelled by inflation and the Ukraine war, the economic outlook of the EU has also suffered a setback. Over and above the fluctuations of the euro, demand for flowers has also dropped because of the severe summer with temperatures rising as high as 40 degrees Celsius in Europe.
Also read;
https://trendsnafrica.com/us-and-kenya-to-develop-a-fresh-road-map-for-engagement-in-three-months/
https://trendsnafrica.com/sanctions-on-russia-drives-up-inflation-in-kenya/
