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Kenya’s Weakening Currency is Pushing Up the Cost of Imports and Debt Servicing Costs

by Eric Olander
AFP/Simon Mania

The Kenyan shilling is rapidly devaluing against the dollar, breaking a record low of 114 this week and prompting fears that a potentially dangerous economic cycle is gaining momentum.

There’s growing concern that Kenya is spending more and more of its limited foreign exchange reserves on imports and debt servicing costs, both priced in dollars, which then provokes currency traders to sell shillings that ultimately leads to a devaluation of the Kenyan currency.

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