Like Zimbabwe, Kenyan traders now quoting prices in US dollars
Firms are now quoting prices in US dollars to hedge against losses from the fall of the shilling.
Sales advertisements for products and services ranging from imported cars to event hosting are being shown in US dollars in what could be an indicator of bleak sentiment on the Kenyan shilling.
The local Mitsubishi Motors and Mitsubishi Fuso truck and bus dealer has changed pricing to dollars in what a source in the company called “new changes from above”.
“For close to a month now, we have changed to pricing in US dollars. We have been instructed to conduct our sales that way and we receive payments in the same currency,” a sales source who requested not to be named told Nairobi News.
Another motor vehicle dealer, Nissan, put a half page advert in a newspaper showing in US dollars the prices of its single-cabin and double-cabin pickup trucks.
PAY IN US DOLLARS
A premier ICT conference of Commonwealth senior policymakers, regulators and industry leaders to be hosted by the Communications Authority next week invited applicants to pay fees in US dollars as well.
The high affinity to the dollar is now the new strategy as firms attest to the rapidly falling value of the shilling against the greenback.
The shilling on Monday edged closer to its worst fall recorded in 2011, closing at 106.5 against the dollar.
CFC Stanbic bank economist Jibran Qureishi attributed Monday’s closure of the 106.5/106.3 to low yields from the short-term treasury bills and market sentiments on the reduced inflation.
“After the reduced inflation figures from last month, it became clear to the market that there would be lesser likelihoods of interest rates increase hence the further weakening of the shilling. CBK’s move to mop out liquidity has also been reversed with declining interbank rates,” Mr Qureishi said.
Interbank rates, which had hit 24 per cent last month, have since fallen by close to half at 13.6 by Monday.
Bank CEOs are expected to meet CBK governor and MPC chairman Patrick Njoroge in the regulator’s latest efforts to arrest the rapid fall in the value of shilling strength.