East African Trends: Tough balancing act for regional currencies

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East African countries have had a tough balancing act in 2020 as the Covid-19 situation oscillated from good to bad over and over again. This is reminiscent of the global situation where central banks have been forced to use high-level tuning and juggling to ensure their currencies don’t fall beyond repair. Even the US dollar, the main international currency has suffered repeatedly with Chinese Yuan and Euro pushing it against the wall.  In East Africa, a tough monetary policy by the central banks has seen currencies remain stable though with significant losses. Kenya for example, has seen its shilling lose ground to the dollar by almost seven points. The Rwandan franc and Tanzanian shilling have survived the wave while the South Sudan pound has been hit hard.  The East African region is primarily a traditional shilling zone that was introduced by the British rulers and used in Kenya, Uganda, Tanzania, Zanzibar, Ethiopia, parts of Somalia, Yemen and Southern parts of Saudi Arabia. The currency was distributed by the East African Currency Board (EACB) whose main function was to maintain the local East African shilling at par with the British shilling.  The region has one of the weakest currencies in Africa and by extension, in the world. A

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