Shilling to hit 160 against the dollar to add fresh consumer pain

The value of the Kenyan Shilling is expected to surpass 160 against the dollar, leading to further financial distress for consumers.
The shilling reached an unprecedented new low against the dollar last week due to a surge in demand for the greenback.
Traders told The Standard that the shilling appears poised to surpass the 160 threshold in it’s exchange rate against the US dollar, despite efforts by the State to prevent it’s decline.
This development poses a fresh headache for the Kenya Kwanza administration and the banking regulator.
According to data from the Central Bank of Kenya, the shilling reached a historic low for the official banking regulator’s printed rate on Thursday, with an average exchange rate of 149.7882 against the dollar.
A spot-check on Thursday and Saturday discovered that retail dollar buyers are currently paying up to KSh157 per unit in banking halls due to the increasing demand for the greenback.
Several major banks had set their selling price for the dollar between KSh155 and KSh157 per unit, while their buying price ranged from KSh141 to KSh148.
Standard Chartered Bank Kenya and Equity Bank quoted the US dollar at KSh155 and KSh155.7 per unit respectively on Thursday, while purchasing it at KSh141 and KSh146 respectively.
Economic crisis
Stanbic Bank was selling the dollar at KSh156 and buying at KSh146 per unit. Similarly, Family Bank is selling the dollar at KSh156 per unit and buying at KSh152 per unit, just like most foreign exchange bureaus.
I&M Bank was selling the dollar at KSh156.3 per unit, while NCBA was selling it at KSh156.25 per unit.
The current economic crisis in Kenya has been exacerbated by the weakening shilling, which is expected to further burden the already struggling consumers.
The high cost of living has already pushed many into poverty. Additionally, the depreciating shilling is now posing a threat to fuel prices, which have already caused public outrage.
The depreciation of the shilling poses a significant challenge to Kenya due to its reliance on imports.
Consequently, any further devaluation of the domestic currency is anticipated to exacerbate the cost of living, inflicting additional hardship on households already burdened by soaring fuel and food expenses.
This, in turn, will contribute to the country’s mounting electricity expenses and the distress associated with servicing it’s debts.
Buyers, for both trading and hedging purposes, will continue to bid higher for the dollar due to the ongoing scramble for the currency.
Despite CBK’s strict penalties on forex market manipulation and a government-supported fuel import agreement, the local currency has continued to decline since the start of the year.
New code
The new foreign exchange code, supported by the CBK, emphasises that market participants must refrain from employing trading strategies or quoting prices with the purpose of impeding market functioning or jeopardising market integrity.
The code stipulates that certain tactics should be avoided, as they have the potential to create unwarranted delays, manipulate prices, and disrupt the transactions of other market participants, ultimately leading to a distorted perception of market conditions such as price, depth, and liquidity.
“Such strategies also include collusive and, or manipulative practices, including but not limited to those in which a trader enters a bid or offer with the intent to cancel before execution (sometimes referred to as “spoofing,” “flashing.” or “layering”) and other practices that create a false sense of market price, depth, or liquidity (sometimes referred to as “quote stuffing” or “wash trades”),” says the code.
Agencies