The Kenyan Shilling has remained steady despite the nationwide Gen-Z protests against the Finance Bill. The exchange rate of Shilling against the U.S dollar has been trapped between the range of 127.5 and 129.5 for the last two weeks.
The shilling has defied predictions of a slump, even during the current nationwide unrest sorrounding the finance bill 2024. Under the bill, the Kenyan government introduced an array of tax hikes to reduce borrowing and budget deficit. After a nationwide public outcry, the government dropped some proposed tax hikes, including a 16 percent tax imposed on the bread.
The youth-led protests continued in major towns across the country despite the announcement. On Tuesday, young people took to the streets to demand that legislators to reject the bill amid the concerns of the rising cost-of-living in the country.
But lawmarkers ignored the demonstrations and passed the controversial bill. After the vote, protesters stormed the parliament complex. The unprecedented events left several people dead after the fired at protestors.
Currency exchange rates are subject to social and political issues, which plays a critical role in setting investor mood and market volatility. Political instability influence the investors’ perception of the risk related to the country.
Furthermore, the political uphealve can downgrade the country’s credit rating, leading to higher costs of borrowing. The could weaken the shilling.
The Kenyan Shilling remains resilient despite the period of intense political upheavel. In 2022, the shilling came under pressure after the general elections. The currency reached an all-time high of 163.00 in late February this year.
Related: How to Invest in Treasury Bonds and Bills in Kenya
But, in mid-February this year, shilling gained rapidly against the US dollar. The shilling currently ranks among the best-performing currencies in Sub-Saharan Africa, having gained 26.45% against the dollar.
The steady shilling demonstrates that the Kenyan economy remains resilient and is likely to stay resilient this year.
