Exactly one year ago, everybody was talking about the messy state of the Kenyan economy. The Kenyan Shilling lost a huge percentage of its value (over 25% in one year), inflation spiked to over 20% and the Central Bank Governor took the bold decision to increase interest rates by a massive 11.75% in 3 months. This move was criticized for being too late and too sudden, and because it made loans unaffordable for a large part of the private sector.
Though, looking at the situation now, things seem to have turned out the right way:
- One euro is worth 108 Kenyan Shillings (against 141 of last year)
- Between July and August, interest rates were cut by 500 basis points down to 13% (it was 18% until 3 months ago). However, this could affect negatively the value of the Kenyan Shilling.
- After reaching a peak of 20% last November, inflation dropped incredibly fast. It is at 6.1% now, and predicted to go down to 3% in 2013