The Kenyan shilling has surged against the US dollar, reaching a high of Sh127 in Tuesday’s trading, indicating a significant upturn in the foreign exchange market. This surge comes after commercial banks closed Monday’s markets with the shilling quoted at Sh129.5 against the dollar.
The USD/KES exchange rate displayed a consistent downward trend throughout the trading day, reflecting growing investor confidence in the stability of the Kenyan currency.
This surge marks a substantial improvement from January 2024 when the shilling was at its weakest point, trading at Sh160 against the dollar.
Central Bank of Kenya (CBK) Governor Kamau Thugge expressed the bank’s approach to the exchange rate, stating, “We’ll allow the inflows and demand and supply of foreign exchange to determine that level but we have to have the right balance.” Thugge emphasized the importance of ensuring that the exchange rate aligns with market economic fundamentals to support exports and maintain a favorable environment for imports.
The CBK’s interventions in the foreign exchange market are believed to have bolstered the shilling’s appreciation against the dollar, with favorable export conditions and steady remittance inflows further contributing to the shilling’s strength. This surge is expected to have positive effects on the cost of goods, manufacturing expenses, and overall economic stability in Kenya.
