Exchange rate in Kenya: The Kenyan shilling weakened against most of the selected major trading currencies as reﬂected in the trade weighted exchange rate index, which rose by 1.9 per cent from 107.3 in 2010 to 109.3 in 2011.
Shilling Exchange Rate in Kenya
The depreciation of the shilling was attributed to the rapid rise in prices of imported manufactured goods, crude oil and mineral fuels imports, coupled with the economic slowdown in Europe (Euro crisis). In addition, a 38.9 per cent increase in the import bill vis-a-vis a relatively slow growth of 24.7 per cent of export earnings contributed to a higher trade deficit, which in turn contributed to the depreciation of the shilling. The shilling strengthened substantially against the South African Rand and Indian Rupee by 14.9 per cent and 6.7 per cent respectively, at the end of 2011.
Within the East African Community, the Kenyan shilling gained against all the EAC currencies. The shilling appreciated against the Rwandan franc, Uganda shilling and Tanzania shilling by 45.5, 3.2 and 1.6 per cent, respectively.