Kenyan Shilling, Naira Loses Against Seemingly Strong US Dollar Kenyan Shilling, Naira Loses Against Seemingly Strong US Dollar
The winds of change are now supporting the US dollar, as the American greenback has emerged victorious amid the recent brewing currency wars. The new currency contenders, including the Kenyan Shilling and Nigerian Naira, are losing their strength against the USD, tanking to new lows in the latest development.
Also Read: US Dollar Hammers Chinese Yuan, Indian Rupee & Japanese Yen
KSH and Naira Hit New Lows Against the USD
The Kenyan shilling, which was outperforming the dollar in March and early April, has now taken a stark turn. KSH is currently being exchanged at 131.44 shillings, noting a significant low against the USD in recent times.
“Data from the Central Bank of Kenya shows that one dollar was exchanging at 131.44 shillings by the end of last week, representing a fifth straight day of weakening for the local unit since April 11.”
Additionally, the rise of KSH has been dubbed temporary. It has been referred to as a weak rally primarily due to its government plans to benefit from short-term investments that may not prove lucrative in the long run.
“Gains from Short-Term Investment It often dissipates quickly when interest rates begin to fall, as the Kenya Treasury bills auction shows.”
Similarly, the Naira slumped against the USD, primarily due to unprecedented intervention by the Central Bank of Nigeria. Naira’s fall, the USD, has prompted its government to take measures to stabilize Naira’s value in the global market.
“Data shows that the CBN has removed about $2.16 billion to stabilize the naira. As of April 15, 2024, data from the apex bank revealed that the external reserves were now positioned at $32.29 billion….Last week, the CBN gave the dollar N1,101, but the parallel market sold at N950. That was what even made some BDCs not bid for a collection of dollars at CBN because when you collect that dollar from CBN, you automatically run at a loss because we sell at N950. Unfortunately for the dollar, banks are now doing their interbank.” The outlet shared
USD: The New Currency Winner
The US dollar has yet again proven its might and potential by portraying its undefeatable stance. Per Bloomberg, the outlet’s US dollar index has gained 4%, signaling a renewed interest and outlook toward the colossal world currency.
Per the Kobeissi Letter, the USD has emerged as one of the strongest currencies as opposed to other leading nations. The handle updated a detailed graph, outlining USD prowess against the Turkish Lira, INR, Chilean Peso, and Brazilian Real.
Also Read: US Dollar Fails to Surpass Nigerian Naira Despite Outpacing Yuan & Yen
“The US dollar has been one of the best-performing currencies of 2024 so far. Some emerging market currencies have weakened by as much as 10% compared to the US dollar. The Chilean Peso, Turkish Lira, and Brazilian Real have weakened by 10.5%, 9.2%, and 8.1%, respectively. A stronger US dollar makes it more expensive for countries to transact with the US.”
