But retail dollar buyers are now paying more than 150 per unit in banking halls and forex bureaus as the demand for the greenback continues to surge, according to a spot check by The Standard.
This is as the margin between the US dollar's printed rate by the CBK and the market rate for customers quoted by banks and foreign exchange bureaus continues to widen.
The depreciation now threatens to pile fresh pressure on the prices of essential commodities.
Interbank market
This bucks projections by the government that the shilling would appreciate on the back of the recently rolled out interbank market reforms and a State import oil deal.
President William Ruto said in April he expected the shilling to strengthen to under 120 per dollar "in the next couple of months", citing an oil import deal that was expected to cut demand for dollars.
"In the next month or so you will see the exchange rate coming down in a very phenomenal way.
"In fact in my estimation, in the next couple of months, the dollar will come below Sh120, maybe Sh115, you never know," Ruto said then in a televised government meeting.
The persisting financial hardships from the worsening currency crisis are squeezing consumers hard, posing an economic and political problem for President Ruto's administration, which is now almost a year into its five-year reign.
Company executives and business captains have cited the weakened shilling as one of their biggest headaches, the banking regulator has warned.
A recent CBK survey found that industry bosses see the volatility of the Kenyan shilling as one of the biggest impediments to growth and expansion of firms in the remainder of this year.
The regulator polled chief executives across sectors last month in the lead up to its Monetary Policy Committee (MPC) meeting, where they reported that they are also concerned about political uncertainty and high interest rates.
"The July 2023 CEOs Survey revealed subdued business optimism about company and sectoral growth prospects on account of high interest rates, the political noise in the country, and the weakening Kenyan shilling," said the survey findings.
"Optimism regarding growth prospects for the Kenyan economy weakened with respondents citing the combined impact of the high cost of living and the weakening shilling as growth-constraining factors."
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A weak shilling is harmful to Kenya, given that the country's economy is driven by imports.
The continued weakening is expected to push up living costs, hurting households already subjected to high fuel, electricity and food prices.
The dollar shortage also creates a black market for the US currency with buyers being at the mercy of sellers.
Kenya imports a wide range of goods including petroleum products, wheat, second-hand clothes, motor vehicles, vegetable oils and industrial machinery, whose costs are rising as the shilling weakens against the dollar.
Its foreign exchange reserves have dropped by Sh29 billion in the last two weeks.
The pool of critical reserves fell to Sh1 trillion during the week ending August 25, the CBK weekly statistical supplement showed on Friday.
CBK can sell these reserves when it wants to boost the value of the shilling and even out volatility. The reserves level is however within the CBK's statutory requirement to maintain at least four months of import cover.
Servicing debt
Foreign exchange reserves are largely tapped for government payments such as servicing external debts and essential government imports such as medicines.
A weaker shilling will keep the price of imports such as fuel elevated, inevitably pushing up the cost of goods and services and further pushing up inflation, which went down 7.3 per cent as of last month.
CBK Governor Kamau Thugge early this month acknowledged the weakened currency is likely to pose a "challenge" in efforts to bring down the cost of living, but exuded optimism that the pressure would ease.
"Obviously, when the shilling weakens, then imported items also become expensive. And that does give us a challenge on on the inflation front," Thugge said in August 10 in response to The Standard queries during the post-MPC meeting briefing with journalists in Nairobi.
Many sectors of the economy are grappling with escalating costs of raw materials and soft demand as rising prices of final products hit consumers' spending power.
However, the weak shilling has come as a boon for exporters.
Exporters such as tea and coffee producers are the winners in the shilling's depreciation, which has the effect of making their products more competitive in the international markets besides boosting their revenue in local currency terms.
Kenyans receiving money from relatives abroad are also counting the forex gains on the hard currency, which they exchange for shillings before spending locally.
Inflationary pressure
The weakening of the shilling has seen manufacturers and importers transfer the additional shipment costs to consumers, increasing inflationary pressure in an economy where households are grappling with expensive basic items like fuel, soap, cooking oil and food.
Access to the greenback had previously also proved difficult for some due to banks being unwilling to sell to each other, which made it hard for smaller players to fulfil their orders from clients.
Manufacturers told The Standard earlier this month that a persistent dollar shortage was forcing them to buy the greenback at a premium above CBK's official average exchange rate.
"There is marginal improvement in daily availability of dollars but it still remains a challenge to the extent that working capital of manufacturers gets tied up in advance purchase to build the required reserves for any commitments," Kenya Association of Manufacturers Chairman Rajan Shah said.
"It therefore continues to have a negative impact on the cost of working capital for businesses."
CBK has made attempts to stabilise the shilling through interest rate increases in recent years.