Inflation rates soar, fuel and food prices spike, as Kenya grapples with economic challenges.
Inflation rates soar, fuel and food prices spike, as Kenya grapples with economic challenges.
Kenya’s economy has relatively gone low compared to 5 years ago in 2018 when the highest exchange rate against US dollar was 102.047 Kenyan shilling and the lowest was 99.3857 shillings.
“The Kenyan Shilling has remained stable against international and regional currencies during the last of September, as of September 28 it exchanged US dollar at the rate of 147.94,” said the Central Bank of Kenya (CBK) in a weekly report.
The usable foreign exchange reserves remained satisfactory at USD 6,939 million, this meets the Central Bank of Kenya (CBK) statutory requirement to maintain at least 4 months of import cover. However, money liquidity has reduced but during the last week the average number of interbank deals increased from 37 to 40 compared to the previous week.
Inflation Rates: Fuel products like Kerosene inflation rate was 13.1%, electricity(50 kilowatts 35.9%, electricity(200 kilowatts)26.4%, diesel 21.6%, petrol17.9% and finally gas/LPG 10.0%. Foodstuffs inflation rate to potatoes was 26.1%, cabbages 10.1%, kales locally known as “sukuma wiki” 4.7%, cooking oil 16.6%, maize/corn flour 5.6% and loose maize grain1.7%.
Major causes of inflation
“Kenya mostly depends on imported fuels to meet it’s energy demands, fluctuation of global oil prices and transportation costs directly impacts the cost of petroleum products prices locally,” said the CBK weekly report. This leads to the increase in the cost of daily life in terms of transportation, food and energy. Secondly, Kenya imports an average of 40% wheat from Russia and Ukraine, the ongoing war between the two countries has affected countries that relied imports from them. Agriculture is one of the main source of income in the country, unfortunately in the last 3 years Kenyan farmers were not able to harvest anything due to lack of enough rainfall, leading to low supply of staple food items like maize and beans. The Government was forced to import food from neighboring countries like Tanzania and Uganda which retailed at a higher cost.
Edited by Judy J. Rotich and Newsdesk Manager
