Troubling Economic Forces Are Converging in Kenya

File image of the Kenyan parliament. Simon MAINA / AFP

The war in Ukraine is exacerbating Kenya’s worsening financial crisis by contributing to higher inflation and adding more pressure to the already embattled shilling. In fact, several potentially dangerous economic forces appear to be converging in Kenya. This interplay will make life more difficult for both policymakers and their constituents:

WEAK SHILLING: The shilling touched new lows last Monday and never made up the ground lost last week when it closed at 114 to the dollar. The weak shilling is a major contributor to inflation and forces the government to spend more of its dollar-denominated foreign exchange reserves to service its external debt and buy imports. (THE STAR)

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by Eric Olander

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