The Shilling has slightly declined to KSh102.11 per dollar from an average of KSh101 per dollar at the start of June.
Central Bank Governor Dr. Patrick Njoroge has refuted claims that the weakening of the Shilling is linked to the demonetization of the KSh1,000 note.
“The movement it has had over the last few weeks is not an issue,” Dr. Njoroge told reporters during a press conference last week.
Just like CBK Governor, Citi Research does not expect a big change in the value of the shilling due to the introduction of new notes. “We expect no significant issues around the issuance of the new banknotes,” read a report produced by the research firm.
Since 2015, the Shilling has been relatively stable. Citi attributes the stability to Kenya’s diversified economy. The country generates its foreign income from a variety of sources like; agricultural exports, tourism, and manufactured exports.
The stability of Kenya’s currency is expected to persist in 2019 and 2020 according to Citi Research. The country’s foreign exchange reserves stand at $10 billion (KSh1.01 trillion) enough to cover 6.4 months’ worth of imports. Dr. Njoroge has reassured the public that his team is prepared to handle any outcome.