Individuals
Businesses
Company
Intelligence
News
African Capital Markets
EnglishEnglish
share on twittershare on linkedinshare on facebookshare to whatsapp
share on mail
share on instagram

Kenya’s currency weakens by most in months after Fitch warning

Daba Finance/Kenyan Shilling weakens after Fitch warning
BREAKING NEWSNovember 8, 2023 at 1:43 PM UTC

After recently hitting a record low of Ksh150 to the US dollar, Kenya's currency experienced its most significant depreciation in four months following Fitch Ratings' announcement that it might lower the country's credit rating. This potential downgrade hinges on the proportion of foreign reserves allocated to meet obligations related to a $2 billion Eurobond maturing in June.

Fitch expressed its concern in a statement released on Tuesday, stating, "Utilizing reserves for the redemption of the Eurobond could diminish import cover, potentially contributing to a credit rating downgrade for Kenya, depending on the extent of the reserve drawdown and the outlook for other external financing sources." 

Nevertheless, Fitch remains optimistic that some of the government's planned additional external financing will materialize, which could mitigate this risk.

Key Takeaways

The recent movements in the exchange rate can be attributed to the strengthening of the US dollar, driven by the ongoing crisis in the Middle East, which has led investors to seek safe-haven assets. This trend is further bolstered by the high US treasury yields. Kenya faces a set of economic challenges exacerbated by its substantial debt burden, which had ballooned to over Ksh10.1 trillion shillings (around $67 billion) by the end of June, accounting for about two-thirds of the country's GDP. Servicing this debt, much of which is owed to China, has become more expensive as Kenya's currency has depreciated. Adding to these challenges, the government is also confronted with the maturity of a $2 billion Eurobond in the coming June. Furthermore, Kenya's economic growth has slowed down, dropping from 7.6% in 2021 to 4.8% in the past year. This deceleration can be attributed to global repercussions stemming from Russia's invasion of Ukraine and a severe regional drought that significantly impacted the crucial agriculture sector.

Kenyan shilling
US Dollar
Monetary policy
Inflation

Think someone else should see this?

share on twittershare on linkedinshare on facebookshare to whatsapp
share on mail
share on instagram
Stay informed with our newsletters read by 25,000+ professionals worldwide
Newsletter companiesNewsletter companiesNewsletter companiesNewsletter companiesNewsletter companiesNewsletter companies

Next Frontier

Stay up to date on major news and events in African markets. Delivered weekly.

Pulse54

UDeep-dives into what’s old and new in Africa’s investment landscape. Delivered twice monthly.

Events

Sign up to stay informed about our regular webinars, product launches, and exhibitions.

+25k investors have already subscribed

To invest in this opportunity and other opportunities across Africa

Download the daba finance app on your mobile through
appstore iconappstore icon
Phone Image

Take action.

Download app

Start investing in Africa’s best opportunities, including stocks, bonds, startups, venture funds, and more.

Partner with us

Unlock exciting business opportunities and growth potential.

Join Daba

Become a part of our vibrant community and enjoy exclusive benefits.

Contact us

Reach out to us for inquiries, support, or collaboration.
For Investor
StrategiesPortfolio ManagementAfrican Capital MarketsNews
Daba Pro Intelligence
For Capital Seekers
For StartupsFor Fund ManagersFor Private CompaniesFor Lenders
For Partners
Commercial BanksBroker DealersAsset ManagersInvestment BanksInvestment Advisors and ConsultantsLenders and Microfinance
Company
About UsMarket UpdatesEventsBlog and PodcastNewsletterCase StudiesAffiliate ProgramInvesting GlossaryOfficial ContactsTrust, Compliance and SecurityFrequently Asked Questions

Terms & ConditionsPrivacy Policy
EnglishEnglish

Owned by Daba Markets Inc. By using this site, you accept our Terms and Conditions and Privacy Policy. © 2024 All rights reserved. 2025 All rights reserved