CS Kuria asks coffee farmers to celebrate weaker shilling against US dollar
Public Service Cabinet Secretary Moses Kuria now says coffee farmers should be celebrating the fall of the shilling against the US dollar.
In a statement on Tuesday, Kuria says the farmers should be rushing to open dollar accounts to benefit from the weakening shilling.
Kuria revealed that the government has introduced the Direct Settlement System (DSS) to pay farmers directly, which will eliminate brokers and cooperatives.
"Dear Coffee Farmers. While importers cry about the strengthening dollar against the Shilling, you are supposed to be celebrating. The Government has introduced the Direct Settlement System (DSS) to pay farmers directly not through brokers or Cooperatives," Kuria stated.
"Please do not trust anyone to convert your dollars or Euros. Rush to your bank today and open your dollar or euro account and negotiate for yourself the best rate."
Shilling against US dollar
As of Tuesday, February 6, 2024, one US dollar was exchanging for Ksh160.36, according to official exchange rates by the Central Bank of Kenya (CBK).
On February 6, 2023, the US dollar was exchanging for Ksh124.66, reflecting a rise of Ksh35.7 or 28.6 per cent.
In December 2023, CBK hiked the benchmark lending rates to the depreciation of the Kenyan currency against major international currencies.
CBK raised the benchmark lending rate to a historic high of 12.5 per cent from 10.5 per cent, attributing it to the sinking shilling against the dollar, which now contributes close to half of the country’s inflation levels.
“We thought the shilling had been overvalued for quite some time, there has since been significant adjustments and we now feel that the shilling has depreciated enough and actually may have overshot the rate required for equilibrium,” CBK Governor Kamau Thugge said on December 6, 2023.
