As the Kenyan Shilling (Ksh) continues with its free fall, the Ugandan Shilling (USH) has emerged as one of the most stable currencies in Africa.
According to Forbes, the United States dollar (USD)/USH exchange rate was at 3,788 on Thursday, January 11.
Remarkably, this was the same rate the USH was trading against the dollar a year ago January 2023.
In juxtaposition, on January 2, 2023, the Ksh was exchanged at a rate of 123 against the dollar while on January 11, 2024, the currency had depreciated and traded at 159 against the dollar.
An employee at a forex bureau holding a thousand Kenyan notes and a hundred dollar bills
Additionally, since 2020 the Kenyan Shilling has shed over 60 per cent of its value against the dollar making.
This has led the Ksh to have one of the biggest plunges in Africa together with the Zimbabwean Dollar, Nigerian Naira and Angolan Kwanza.
The weakening of the Kenyan Shilling has been largely attributed to trade and budget deficits as well as the scarcity of the dollar.
Monetary policies introduced by President William Ruto’s administration have also been seen as a contributing factor to the free fall of the local currency.
Increased taxation, one of Ruto’s fiscal policies, has seen the private sector contract, leading to less foreign-exchange-generating activities.
In an earlier interview with Kenyans.co.ke, economist Vincent Kimosop explained that it was prudent to examine the main issues exerting pressure on the Kenyan Shilling.
Kimosop explained that Kenya imported a lot of goods including agricultural products contrary to Uganda.
The overreliance on imported goods created a dollar scarcity since it is the main medium of exchange.
“Uganda is a food surplus country. In terms of the cost of living, it is relatively cheaper,” he explained then.
President William Ruto together with President Yoweri Museveni of Uganda at a meeting at State House Uganda on October 9, 2022.