Why dollar-denominated money market funds have set Kenya abuzz

Today, the shilling is exchanging at Sh129 against the dollar compared to Sh160 in January 2024. [Courtesy]

Is it for speculation or cushioning against inflation? This is the question around the recent fad by many investors to take up dollar-denominated money market funds (MMFs).

Kenyans are flocking around this class of MMFs, which has seen assets under management by fund managers double to Sh28.7 billion in just 12 months at the end of 2024.

In 2021, assets under management for US dollar-denominated MMFs were Sh4.5 billion, with the shilling exchanging at Sh109 against the greenback.