Why landlords are charging rent in US dollars

As the Kenyan shilling continues to weaken against the United States dollar, more landlords in Nairobi are now charging rent in dollars.

This includes commercial spaces and residentials which have witnessed a continued rise in charges, Business Daily reports.

Investors say this will help cushion them against the fluctuating exchange rates which have contributed to rising inflation over time.

"There has been increased preference from investors to have rent in dollar payments due to the ongoing depreciation of the Kenyan shilling," Knight Frank, a property consultant says in Kenya Markets Update.

This has also been witnessed in selling of goods, where retailers have increased prices of old stock to recover enough money to acquire new stock, due to the differences in exchange rates.

As at February 8, Central Bank of Kenya(CBK) data showed that 1 US dollar is now selling at KSh124.91. This weakening trend has been observed over the past 12 months. For instance, as at January 5, the US dollar sold at KSh123.48, an increase from KSh123.33 by December 29, 2022.

Commercial banks in Kenya are however charging even higher rates, where 1 US dollar is selling at KSh134.