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Shilling down: good for tourism, bad for Kenyans

Euro at 130, dollar at 123, the reasons why

19-12-2022 by redazione

For those arriving in Kenya in the coming days, a cakewalk. For those living there and particularly Kenyan citizens, increasingly a drama. Inflation, Kenya's public and foreign debt have reached all-time highs, leading the dollar to be exchanged at 123 against the shilling and the euro at 130.
For tourists bringing in foreign currency so it is a favorable time, especially for those who plan to live "African-style," while for those seeking imported products or services that involve the use of means and price hikes, it is already more of a problem. Those accustomed to "thinking in shillings" for example will find me transportation prices increased, due to higher oil prices, and so too with regard to safaris and other services that require travel or transportation.
Inflation is mainly due to the weight of the dollar as the U.S. Federal Reserve has raised interest rates on the debt of developing countries including Kenya.
Tourism and the arrival of cash can only be good for the country at this time, as foreign debt payments have meanwhile depleted Kenya's official foreign exchange reserves at the Central Bank of Kenya (CBK), which are currently below the legal threshold for covering imports over the next four months. According to Treasury data, the country's public debt, as of the end of October, exceeded $71 million, or 62.3 percent of the country's gross domestic product, reaching unprecedented levels.
The stock of domestic debt stood at $35.6 billion (31.2 percent of GDP), while that of foreign debt was quantified at $35.4 billion (31.1 percent of GDP). The bulk of the load to foreign countries is in dollars (69.3%), followed by euros (18.8%) and yuan (5.3%).

TAGS: scellinoeurodollarodebitoinflazioneeconomia

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