The Kenyan shilling remains solid and strong against the dollar, keeping the US currency used for trade at bay and also a benchmark against the euro for every transaction.
Dollar below 130 shillings (and around 141 with the euro). The figure, while perhaps not pleasing to the tens of thousands of tourists arriving in the African country these weeks, certainly satisfies those who invest and have their businesses here.
According to the London Stock Exchange, the shilling's strength persists despite the dollar having strengthened elsewhere in the world, with the US Federal Reserve not cutting interest rates aggressively before the next presidential election, scheduled for 5 November.
Economically, who should we root for in relation to the health of Kenya, its currency and inflation?
According to US experts, Donald Trump's victory would keep the dollar in great health, giving optimism in the foreign market. For the shilling, the scenarios are dubious: on the one hand, the stabilisation of the dollar, albeit in dominant terms, would curb any sharp swings that could upset the economy and lead to speculation by the Kenyan domestic market; on the other hand, a stricter policy on loans and cooperation could bring back to the fore the shenanigans buried lately by the Central Bank of Kenya, The shilling's resilience is in fact still due to the effect of the new Eurobond signed in June after the expiry of the previous one, which was dated 2014, but it was also supported by inflows from the tourism sector and agricultural exports such as tea, which cushioned the negative effects of the political unrest and the delay of the International Monetary Fund loan. On the other hand, a Kamala Harris victory, increasingly less likely, would maintain the climate of indecision over wars and other trade blockades that a promisingly growing nation (at least before the Covid and the Russian-Ukrainian issue) is not at all conducive to.
In September, year-on-year inflation fell to 3.6% from 4.4% in August, thanks in part to a reduction in the cost of imported goods. Monthly inflation remained stable at 0.2%, reflecting the impact of the strengthening of the schilling on consumer prices.
The stability of the shilling also allowed for a further reduction in the price of petrol, which fell by about 8 shillings per litre since yesterday. The reduction of currency risks could ignite new confidence in sectors that offer stable returns, paving the way for a resumption of economic growth.
Until at least the next knot in the comb, probably with blond hair to carry over.