Kenya Shilling Below Ksh 130 per Dollar: What It Means to Local Manufacturers, Consumers

• In February 2024, the Central Bank of Kenya (CBK) took measures that saw the value of the shilling propped up against the US dollar
• The shilling continued to report gains against major global currencies to trade at KSh 127.16 as of Monday, April 8
• Speaking to TUKO.co.ke, Kenya Association of Manufacturers chief operating officer (COO) explained that the strength of the shilling has been positive for local manufacturing since February 2024

TUKO.co.ke journalist Wycliffe Musalia brings over five years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends.

Kenyans could continue to enjoy cheaper products in the market as the shilling rallies against the US dollar.

Local manufacturers reported an ease in the cost of production for the past two months since the shilling regained strength in February 2024.

The local currency exchanged at KSh 127.16 per dollar on Monday, April 8, proving its position among the best-performing global currencies.

What does strong shilling mean for importers?

In an exclusive interview with TUKO.co.ke, Kenya Association of Manufacturers (KAM) chief operating officer (COO) Tobias Alando explained that the appreciation of the shilling has lowered the cost of imports.

"For manufacturers, the depreciation of the dollar is positive. The imports are now becoming affordable," said Alando.

Alando detailed that a stronger dollar means your imports are expensive, and a weaker dollar translates to cheaper imports.

How strong shilling lowers consumer prices

The COO added that with a weaker dollar, Kenyan manufacturers are able to import raw materials at fair prices, making the cost of production affordable.

He added that the drop in the cost of production will translate to reduced consumer prices in the market.

"We are looking at it from the manufacturer's angle. We import a lot of raw materials and accessing them at an affordable rate will make our production cost lower and offer affordable prices to the final consumer.

"As we continue importing, and the prices become low, we will reduce our consumer prices," he noted.

In 2023, KAM warned of rising costs of production exacerbated by the weakening shilling.

KAM CEO Anthony Mwangi warned that the cost of imports, production, and distribution of raw materials and goods will continue to shoot should the shilling continue to depreciate.