Kenyan economy is struggling to attract foreign investment and maintain a stable exchange rate. The CBK has attributed the shortages to a decline in foreign currency inflows, particularly from the tourism and horticulture sectors, which have been hit hard by the COVID-19 pandemic.
The shortage of foreign exchange has led to a surge in demand for dollars on alternative markets, where the exchange rate is higher than the official government rate. This has put additional pressure on Kenyan businesses, which are already grappling with rising inflation and high borrowing costs.
The CBK has urged businesses to explore alternative sources of financing, such as local currency loans and trade financing, to mitigate the impact of the forex shortages. However, some businesses have warned that the limits on forex purchases could curtail their operations and lead to job losses.
The government has also come under pressure to address the forex shortages, with some analysts calling for a review of the country’s foreign exchange policies. The CBK has said that it is working with other government agencies to address the issue and ensure that the economy remains stable.
Despite the challenges, some businesses remain optimistic about the future. “We are confident that the government will take the necessary steps to address the forex shortages and support the growth of the Kenyan economy,” said a spokesperson for a leading Kenyan manufacturer. “In the meantime, we are exploring alternative financing options and working to streamline our operations to remain competitive.”
