Kenyans ramped up their wealth held in dollars ahead of the country’s general elections that occurred on 9th August 2022.
According to reports, the value of savings in dollar-denominated bank accounts rose by $527 million from May 2022 to June 2022.
As reported by the Business Daily Africa, data from the Central Bank of Kenya shows that foreign currency bank deposits held hit a historic high of $7.5 billion in June 2022, up from $6.9 billion in May 2022, making it the biggest monthly jump on record.
This latest move has been interpreted as wealth preservation by Kenyans looking to protect their assets, with the country having a history of contested elections that have resulted in violence and prolonged business closure.
Other than election, Kenya is one of the countries in Africa that has been hit hard by tough economic times, with the country’s latest inflation rate hitting 8. 3% in July 2022, the highest in 5 years. The high inflation has been accompanied by an increase in the cost of living, with rising food and fuel prices reported ahead of the election.
One of the biggest factors however for the move has been the devaluation of the country’s fiat currency, the Kenyan Shilling (KES), against the dollar. The latest data indicates that Kenyans require about 119 shillings to purchase the dollar, a figure which has risen by about 10 shillings in the last 12 months.
Further analysis reveals that speculators in Kenya may have been looking to gain profits as the dollar goes from strength to strength following the US Central Bank raising interest rates.
The latest development comes as businesses in Kenya struggle to get dollars to meet their business obligations, amidst a shortage of the dollar within Kenyan banks, a situation that has also been felt in Nigeria.
The dollar is also favored because it is perceived as the most secure against economic stress.
