Kenya Curbs Foreign Exchange Market Pressure With New Oil Deal

Kenya’s government has devised a clever strategy to reduce the strain between the national currency and powerful foreign currencies. This strategy was implemented after the East African nation’s usable foreign exchange reserves decreased to a level that was insufficient to pay for all types of imports for less than four months.
According to Energy Minister Davis Chirchir, the government has launched its first oil import tender under a new mechanism intended to reduce pressure on the foreign exchange rate by converting to 180-day credit from settlement on delivery. President William Ruto’s government chose oil supply contracts after the shilling (the currency of Kenya) plunged to a string of record lows since last year.
“The bids opened yesterday, and the government is reviewing them,” said Daniel Kiptoo, the director general of the energy industry regulator, EPRA. Oil prices account for a significant part of the increase as international benchmark Brent is above $80 a barrel, even though it has dropped from a peak of $139 in March last year.