Commercial banks see renewed pressure on the Kenya shilling against key global currencies, including the US dollar, citing a cash crunch on the government following rejection of the Finance Bill 2024, which expanded the budget deficit and eroded the country’s sovereign credit ratings.
The Kenya Bankers Association (KBA), the umbrella lobby of the commercial banks, noted that the wider-than-expected fiscal hole will keep domestic interest rates high as investors take advantage of the government’s increased cash requirements to demand steeper returns on Treasury securities.
