Thursday, June 8, 2023

Sh. 1,000 note in July 2013 is today worth less than Sh. 550

The Kenya shilling is trading at an all-time low of Sh. 125 to the US dollar. The shilling has been losing approximately Sh. 1 every two weeks.

Over the past one year alone, the shilling has crushed from around Sh. 104 to the US dollar to the current historic lows.

This has seen the shilling one thousand note lose value exceedingly. For instance, as at August 2022 just before the exit of former president Uhuru Kenyatta’s government, the shilling had lost value by 45 per cent. A Sh. 1,000 in July 2013 was now worth just Sh. 548.60.

This meant that consumers could no longer stretch the shilling as they used to prior to President Uhuru’s tenure as head of State.

In tandem, things have gotten worse under President William Ruto’s presidency. With the shilling now trading at highs of close to Sh. 126 against the US dollar, the value has deteriorated even further.

Purchasing power has reduced. A half litre packet of milk that cost Sh. 38 in 2013 is today retailing at Sh. 58. The average price of a kilo of beef has jumped to over Sh. 530 from Sh. 343 a decade ago.

A litre of petrol is today retailing at Sh. 177 in Nairobi, up from Sh. 111.30 in July 2013. Electricity charges have also gone up, with the lowest tariff going from Sh. 10.16 per unit in 2013.

The fall of the shilling has been gradual but steady and painful. Official data shows that as at 2011, Sh. 1,000 could easily buy 10 items – say a kilo beef, tomatoes, English potatoes, rice, matumbo and dry beans.

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You could also add in your shopping basket a 300ml bottle of soda, a matchbox, a packet of cigarettes – for the smokers – and a bottle of Tusker Lager for those who consume such beverages.

What’s more, after your shopping, you would be left with Sh. 35 that could come in handy as bus fare.

By 2020, however, you needed an additional Sh. 627 to buy the same items, according to retail prices of select consumer products given by the Kenya National Bureau of Statistics (KNBS).

The fall of the shilling has also come at a time when the cost of living is blowing through the roof. For instance, the overall year on year inflation rate as measured by the Consumer Price Index (CPI) was 8.3 per cent, in July 2022.

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