Kenya’s shilling is weakening because of the country’s widening current account gap and the long-term solution to stabilizing the currency is boosting exports, Finance Minister Robinson Githae said.
The increasing deficit on the current account, the broadest measure of trade in goods and services, is “worrying,” Githae told reporters today in Nairobi, the capital.
“It means we are importing unnecessary items,” he said.
Kenya’s current account deficit widened to $4.45 billion in the year through February from $2.27 billion a year earlier, the central bank said in a Monthly Economic Review on May 31.
The shilling weakened last month because companies with overseas shareholders remitted dividend payments, Githae said. The currency is also under pressure because of declining Treasury-bill rates, he said.
The shilling depreciated 3.5 percent last month, making it the sixth-worst performer among African currencies, according to data compiled by Bloomberg.
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