The buying power of the once mighty and revered Sh. 1,000 note has dipped rapidly over the past one year.
Since October 2022, the worth of the Sh. 1,000 note has fallen to lows of Sh. 850, in tandem with the general depreciation of the local currency that has been aggravated over the past one year.
This means that consumers are no longer able to stretch the shilling as far as they used to prior to October 2022.
Analysts have attributed this fall of the mighty Sh. 1,000 to among others punitive taxation, high cost of living, and the depreciation of the local currency.
Currently, the Kenya shilling is exchanging at rates of 150 to the US dollar according to data from the Central Bank of Kenya.
In August 2022, the Kenya shilling was exchanging at rates of 119 to the US dollar. In commercial banks, the exchange rate is even higher at a range of between 154 and 157, and is expected to hit 160 over the next thirty days.
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The shilling has been losing one bob to the dollar per week. It has also lost among regional currencies such as the Uganda and Tanzania shillings.
The purchasing power has reduced across a variety of items. In the August 2022 to September 2022 period, Sh. 1,000 could buy you 6.3 litres of petrol at a price of Sh. 159.12 per litre. Today, the same Sh. 1,000 can only buy you 4.6 litres of petrol at an average price of Sh. 217 per litre. This means that fuel that used to last a whole week can now last about four days.
In the same period, Sh. 1,000 could have bought you 7.1 litres of diesel at a price of Sh. 140 per litre. Today, the same amount of cash is worth just 4.8 litres of diesel at a price of Sh. 205.47 per litre.
Sh. 1,000 could have bought you 7.8 litres of kerosene at a price of Sh. 127.94 per litre. Today, the same amount is worth 4.8 litres of kerosene at a price of Sh. 205.06 per litre.
For the salaried, statutory deductions for someone earning Sh. 100,000 salary have also increased from Sh. 23,959 in October 2022 to the current highs of Sh. 26, 339 and are expected to increase even higher once mandatory social health insurance levies are effected from in the next two months.
This salary figure has also suffered from a loss due to inflation of Sh. 8,000, taking the salary loss since October 2022 to Sh. 34,339. This means that someone who used to take home Sh. 76,041 in October 2022 is now taking home Sh. 65,661.
Their counterparts who have been earning Sh. 50,000 have not been spared either as they have lost 13 per cent of their purchasing power over this period.
