The Kenyan Shilling decline linked to protests

Kenyan currency dropped due to disruption in economic activities, especially in trade and tourism.
Recent protests in Kenya contributed to the decline in the currency's value.
Shilling currently trading at 169.408 against the British pound and 142.89 against the euro.

Recent data from Kenya’s Central Bank, as seen in the Star newspaper, reveals that the country’s currency was as of Friday, trading at Sh131.574 against the US dollars.

This decline is contrary to the currency’s performance in recent months going from Shs161/$ to now Shs128.66/$.

In June, it was reported that the Kenyan Shilling was one of the best performing currencies in Africa, as the currency rose to a 15-month high against the US dollar. The last time the currency was that strong was in March 2023.

The Star's report reveals that prior to the start of the rallies, the shilling maintained its lead, trading at 128.77 to the dollar before sliding to 129.52 on June 27 and 130.46 by July 19.

According to financial analysts, protests played a significant role in the shilling's depreciation.

“The Kenya Shilling remained stable against major international and regional currencies during the week ending July 25. It exchanged at Sh132.22 per US dollar on July 25, compared to Sh129.99 per US dollar on July 18," a statement from CBK read.

While the Kenyan Shilling has been performing well throughout the year, this would not be the first period the currency suffered a setback during the year. In April the currency was trading at 133.99/USD.

Additionally, the currency had been very weak in January, when it was trading at Sh160. Then it was reported that the Kenyan Shilling and Nigerian Naira were two of the worst performing currencies on the continent.

According to the data, the shilling is now trading at 169.408 against the British pound and 142.89 against the euro. The shilling had been pegged at 178.85 against the sterling pound and 152.32 against the euro by the central bank last month.

Kenya’s protest

In the past few weeks, the protests in Kenya against the new tax bill introduced by President Ruto spiraled out of control. What was intended to be a peaceful protest in Nairobi turned violent with over 40 deaths reported.

The tax was imposed on basic amenities, products that contribute to e-waste and harm the environment, imported products, and products and services used directly and exclusively in the building, which infuriated Kenyans, particularly the youths.

Soon after the protests turned deadly, the president was forced to withdraw the tax bill, however, the damage had already been done, and as a result, the youths began calling for the resignation of the president.