Sharp Daily
No Result
View All Result
Wednesday, July 30, 2025
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
Sharp Daily
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
No Result
View All Result
Sharp Daily
No Result
View All Result
Home Money

Fitch ratings caution triggers dip in Kenyan shilling

Editor SharpDaily by Editor SharpDaily
November 10, 2023
in Money
Reading Time: 2 mins read

The Kenyan shilling experienced its most significant dip in four months, reaching a record low of KES 152.80 against the dollar following Fitch Ratings’ statement that it may downgrade the nation’s credit rating depending on the portion of foreign reserves it uses to settle payments on a USD 2 billion Eurobond due in June 2024.

Fitch’s cautionary statement on Tuesday, November 7, 2023, highlighted the risk associated with using reserves to settle the Eurobond, which could decrease import cover and possibly trigger a downgrade. The move would have repercussions on the 2024 bond, a focal point for investors already wary of Kenya’s growing debt burden amidst escalating energy and food import bills.

In July, Fitch revised Kenya’s debt outlook to negative while maintaining its credit rating at B, classified as highly speculative. The 2024 bond has been under scrutiny due to concerns about the nation’s ability to manage its debt, especially given the strain on foreign-exchange reserves caused by rising debt service costs and import bills. At USD 6.8 billion, the reserves currently cover 3.7 months of imports. This precarious situation stems from a reluctance to explore refinancing in capital markets due to the prevailing high-interest rates.

Treasury Secretary Njuguna Ndung’u revealed in a recent interview with Bloomberg that Kenya is contemplating borrowing from multilateral and bilateral lenders to facilitate the Eurobond repayment. Talks are underway with entities such as the International Monetary Fund (IMF), World Bank, Trade and Development Bank, as well as bilateral lenders in China, including the Export-Import Bank of China and the China Development Bank. These Chinese institutions are significant holders of loans to Kenya.

RELATEDPOSTS

Shilling holds steady as foreign exchange reserves hit KES 993 billion

September 13, 2024

Kenya shilling strengthens as government settles final eurobond amount

June 13, 2024

The government’s ambitious target to secure KES 1.0 trillion, equivalent to 6.3 percent of gross domestic product (GDP), in foreign financing, including 467.0 billion KES in commercial financing, is raising eyebrows. Fitch suggests that this goal might be overly optimistic, estimating that Kenya could realistically secure around USD 4.0 billion in external funding. This assessment reflects the challenging economic environment and heightened scrutiny from international rating agencies.

The prospect of a credit rating downgrade has implications for Kenya’s broader economic stability. A weakened credit rating could increase borrowing costs and reduce investor confidence, potentially leading to a downward spiral for the shilling and an increase in bond yields. This environment of uncertainty requires the Kenyan government to carefully navigate its financing options, weighing the potential benefits of tapping into multiple funding sources against the risk of a credit downgrade.

Previous Post

Government to provide free data to promote newly launched smartphones

Next Post

Oil prices rebound amidst Middle East tensions

Editor SharpDaily

Editor SharpDaily

The latest in business, real estate, education, investments, tech and entrepreneurship, brought to you daily. Reach us through thesharpdaily@gmail.com

Related Posts

Analysis

Transferring Your Retirement Benefits Between Pension Schemes in Kenya

July 23, 2025
Investments

Invest in stability: introducing the Cytonn USD money market fund

July 18, 2025
Money

The Importance of Asset Diversification on Kenyan Pension Funds

July 18, 2025
Analysis

Park your money where it grows: Why more Kenyans are turning to Cytonn Money Market Fund

July 16, 2025
Money

Why Employers Should Prioritize Pensions Over One-Time Gratuity Payments

July 10, 2025
Analysis

Kenya’s CIS market: Q1′ 2025 shows a surge, setting the stage for future expansion.

June 26, 2025

LATEST STORIES

Shri Krishana Overseas lists on NSE

July 25, 2025

Why young professionals should care about pensions

July 23, 2025

How Kenya can reinforce fiscal rules to prevent recurrent budget overruns

July 23, 2025
commercial illustrator

Why Kenyan private equity firms should consider continuation funds as an exit strategy

July 23, 2025

Transferring Your Retirement Benefits Between Pension Schemes in Kenya

July 23, 2025

Invest in stability: introducing the Cytonn USD money market fund

July 18, 2025

The Importance of Asset Diversification on Kenyan Pension Funds

July 18, 2025

Park your money where it grows: Why more Kenyans are turning to Cytonn Money Market Fund

July 16, 2025
  • About Us
  • Meet The Team
  • Careers
  • Privacy Policy
  • Terms and Conditions
Email us: editor@thesharpdaily.com

Sharp Daily © 2024

No Result
View All Result
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team

Sharp Daily © 2024