Kenya’s foreign exchange reserves have continued their steady climb, bolstering the shilling’s resilience amid persistent global uncertainties. The Central Bank of Kenya (CBK) has reported that reserves rose by $112 million (Sh 14.4 billion) in the week ending July 10, 2025, pushing the total to $11.201 billion (Sh 1.445 trillion) a level equivalent to 4.9 months of import cover.

The latest figures mark a notable rise from the previous week’s $11.091 billion (Sh1.430 trillion) and remain above CBK’s statutory minimum threshold of four months of import cover.

According to the CBK’s weekly bulletin, this upward trend in reserves has remained consistent since May, with an overall gain of $1.037 billion (Sh133.7 billion) recorded in just eight weeks.

A stronger reserve position enhances the competitiveness of the Kenyan shilling, which held steady during the review period.

On July 10, the shilling traded at Ksh129.24 to the US dollar, Sh151.77 against the Euro, and Sh175.96 to the British pound the same levels recorded a week earlier.

Economist Alexander Riithi from The Institute of Social Accountability (TISA) attributes the robust performance to increased dollar inflows from diaspora remittances and export earnings, particularly from tea and coffee.

"Despite a decline in overall exports, inflows from key sectors and remittances have remained strong, offering crucial support to the local currency," said Riithi.

Recent disbursements from the World Bank and the International Monetary Fund have also helped shore up the reserves.

Diaspora remittances rose to $423 million (Sh54.5 billion) in June 2025, up from $372 million (Sh47.98 billion) a year earlier an increase of 13.8 percent.

CBK maintains that this consistent growth in remittances is a vital source of foreign currency and continues to support Kenya’s balance of payments.

However, some observers have raised concerns about the apparent stability of the shilling in an environment where major global currencies are appreciating. This has sparked speculation about possible market intervention.

National Treasury Principal Secretary Dr. Chris Kiptoo has dismissed the speculation, stating that the CBK’s dollar purchases are meant to prevent the shilling from becoming too strong.

He suggested that without this intervention, the shilling could have appreciated to around Ksh100 per US dollar.

"Reforms implemented by the central bank have contributed to stabilizing the shilling. While the currency was projected to weaken to Ksh250, proactive market participation reversed that trend," Kiptoo said.

Despite the benefits of a stronger currency for imports, economists like Kwame Owino of the Institute of Economic Affairs warn that an overly strong shilling could dampen export competitiveness and make the tourism sector less attractive to international visitors.

"The current rate of Sh129 is already too strong to support optimal export growth or attract price-sensitive tourists," Owino noted.

As the CBK continues to navigate between stabilizing the shilling and protecting Kenya’s external sector, attention now shifts to how long this balance can be sustained without compromising key economic drivers.