Browsing: foreign currency

• The rise of 63 billion shillings in dollar deposits, equivalent to 2.1 billion shillings daily
• wealthy individuals and large corporations looked for a secure location to store their riches in the wake of the uncertainties surrounding the elections
• The United States Federal Reserve increased interest rates by 0.75 percentage points for a second straight time in July to combat inflation, which contributed to a stronger dollar and a decline in the value of the Kenyan shilling

A record number of wealthy individuals and businesses moved a total of Sh63 billion more into dollar accounts during the month of June as they sought to secure the value of their investments in advance of this week’s elections.

As per data provided by the Central Bank of Kenya (CBK), the total value of foreign currency bank deposits in Kenya reached a new all-time high of Sh891.5 billion in June, up from Sh829.50 …

Despite these fundamentals, the Zimbabwe dollar has continued to slide against the United States dollar prompting the government to take drastic and unprecedented measures last month which culminated in the prohibition of bank lending (albeit temporarily), the prohibition of third-party international payments, the prohibition of third-party payments to stockbrokers and the introduction of taxes which can be viewed as punitive for investors on the Zimbabwe Stock Exchange.

Prior to these stringent measures, the monetary authorities had instituted a policy called willing buyer willing seller to try and narrow the gap between the official foreign currency exchange rate and the parallel market foreign currency exchange rate. This gap between the 2 exchange rates reached its peak in the first week of May 2022 at 153% according to a Zimbabwe publication called the Business Weekly.

The premium between the parallel market rate and the official rate has reduced somewhat to 60%. The …