It’s a new week and to kick it off we’re talking about inflation. Inflation is an area that doesn’t receive the attention it deserves but today is all about demystifying inflations and the impact it has on you!

With me, I have my fellow colleague John Jumwa, an investment analyst at Faida Investment Bank. You will want to listen to what John has to say!

You can find more videos in my Investing in Kenya segment in this link –

#MoneyWiseKE #InvestingInKenya #DigitalEmpowerment #CTA101…(read more)

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Investing in Kenya: Inflation – Money-Wise With Rina Hicks

Kenya is a dynamic and fast-growing economy in East Africa with a lot of investment opportunities. However, like any other developing country, inflation is a challenge that investors need to consider.

Inflation refers to the steady increase in the general price level of goods and services in an economy over a certain period. This means that the purchasing power of a unit of currency declines, and investors must adjust their investments accordingly.

In Kenya, inflation has been on the rise over the years, with the average rate standing at 5.2% in 2020 compared to 4.7% in 2019. Factors contributing to this inflation include high taxes, high energy costs, and the weakening of the Kenyan shilling against major currencies such as the US dollar and the Euro.

So, what does this mean for investors in Kenya? Here are some tips on how to navigate inflation as an investor:

1. Diversify your investments

It is essential to diversify your investment portfolio to include assets that are not affected by inflation. For instance, investing in real estate can be an excellent way to hedge against inflation since properties often appreciate in value over time. Additionally, investing in stocks, mutual funds, and bonds can help spread the risk across different assets while still providing returns.

2. Invest in commodities

Investing in commodities such as gold and silver can be a great way to protect your investment against inflation. These commodities tend to hold their value even during times of rising inflation since they are not subject to the same economic pressures as other assets. However, it’s important to be cautious when investing in commodities since their prices can be volatile and subject to sudden fluctuations.

3. Follow monetary policy developments

Kenya’s Central Bank often adjusts its monetary policy to manage inflation. Therefore, it is crucial to keep up with any new developments and policy changes. For instance, the Central Bank may raise interest rates to deter borrowing and reduce the money supply, ultimately reducing inflation rates.

4. Consider international diversification

Investing in other countries can be an option, especially if you want to mitigate the effects of inflation in Kenya. A diverse portfolio can shield your investments from domestic economic and political risks. However, international investments come with additional risks such as foreign exchange risks and regulatory compliance.

5. Work with a professional financial advisor

Financial advisors can provide valuable advice on how to navigate inflation and minimize its impact on your investments. They can help you assess your risk tolerance, identify investment opportunities, and diversify your portfolio accordingly.

In conclusion, investing in Kenya is a viable option for investors who want to take advantage of a fast-growing economy. However, investors must be prepared to navigate inflation since it poses a risk to investments’ returns. By diversifying their portfolios, investing in commodities, and following monetary policy developments, investors can mitigate the effects of inflation and generate returns in Kenya.