The shilling gains against the dollar have masked its decline against other currencies which have a positive impact on Kenya’s agriculture exports to the United Kingdom and Europe.
The dollar is losing ground against a basket of currency globally and Kenyan shilling exchange fell to 102 units to the dollar for the first time since December 9, 2016.
The Euro has shot 4 percent against the dollar in the last one month to a year high on the back of a combination of an economic recovery in the Eurozone.
The Sterling pound has also risen against the dollar as the sell-off in the US resumed, which put the pound on track for its strongest monthly performance since May 2009.
However, these two currencies are gaining ground against the greenback at a faster rate than the shilling.
“The Kenya Shilling strengthened against the US Dollar but weakened against the Pound Sterling, the Euro, and the Japanese Yen during the week ending January 25, 2018,” CBK said last week.
Kenya shilling against the dollar is historically significant especially since Kenya is a net importer and does most of its trade including buying oil in dollars.
However, the Euro and Sterling are important to exporters who are now making more money taking cut flowers to Europe as the shilling loses ground to the European currencies.
Between December last year, one sterling pound would earn an exporter 137 units of the shilling now they get 144 units. And while they got 121 units for each Euro in December, they are now getting 126 units.
In fact, the decline against the Euro has helped the shilling to gain against the dollar. Reuters reported that the Kenyan shilling held steady against the dollar on Friday supported by horticulture export earnings, traders said