Coronavirus effect but not only that, the fact is that the Kenyan Shilling has reached an all-time low against the U.S. dollar (108.7) and is approaching the lowest odds ever even towards the euro, after reaching the ratio of 130 to one.
This depends above all on the demand for energy imports, while as far as exports are concerned, only a few days ago Kenyan companies resumed their activity after months of closure and restrictions due to the pandemic emergency.
Times of speculation on the trend of currencies, which do not only concern the African country, but also possible investments in Kenya, in the construction sector and in the purchase of products related to the leather sector, manufacturing as well as agro-food.
It would also be a good time for tourism and rentals, but obviously the difficulties of travel and the closures of Europe to almost all the countries of the Black Continent for reasons unrelated to work, study, volunteering or family reasons hinder the possibility of enjoying a safari or a beach holiday at competitive prices. Not least because these prices, with the favourable exchange of a shilling, would be frustrated by the higher costs of air tickets than in the past and the need for insurance to cover at least some of the possible inconveniences of Covid-19.
According to the experts, the situation should improve from September onwards with regard to international trade and the import-export ratio, but a worsening of the domestic economy with consequent inflation is also to be expected.
The continuing depreciation of the shilling risks further increasing the cost of living for families, because in general importers will have to pay the bill for the increase to consumers and the large retail chains are already reviewing their prices to avoid collapse.
In recent days, the Government has decided to increase gasoline and diesel and experts from the International Monetary Fund confirm that with the collapse of global demand and commodity prices, capital outflows, major supply chain disruptions and a generalised decline in global trade, many emerging market and developing economy (EMDE) currencies have weakened sharply.
But those who have resisted these months of zero gains, with the reopening of exports, will be able to recover quickly, taking advantage of this impasse where domestic market increases are still not affecting exports.
In Kenya, among the sectors that have suffered most from the crisis is the horticultural sector, which almost stopped in March when all the countries of the world applied trade restrictions to curb the spread of Covid-19.
Now the sector is recovering because maintaining the prices of its exports in dollars, the return of demand will earn at least five shillings more per dollar and even in Europe, where the flower sector has eighty percent of its customers, the Euro is stronger than six months ago against the shilling.