The Kenyan Shilling has managed to hold its ground for nearly a year despite global market volatility, higher oil prices, and heavy debt repayments, trading at around Sh129 to the US dollar, according to the Central Bank of Kenya (CBK).
CBK Governor Dr. Kamau Thugge, speaking during the release of the Monetary Policy Committee (MPC) decision on Wednesday, August, 13 2025, in Nairobi, credited the currency’s resilience to steady and diverse foreign exchange inflows, better investor confidence, and sound economic management.
As of August 11, Kenya’s foreign exchange reserves stood at about USD 11 billion, enough to cover 4.8 months of imports. Dr. Thugge said this buffer shields the country from short-term financial shocks.
Earnings from exports such as tea, coffee, horticulture, vegetable oil, and manufactured goods helped push total goods exports up 7.7% in the year to June 2025. Services like transport and tourism brought in 12.5% more foreign currency over the same period, while diaspora remittances rose 12.1%.
Offshore bank inflows and financial support from development partners further strengthened the shilling.
The MPC report also showed Kenya’s current account deficit narrowed to 1.6% of GDP from 1.8% in 2024 and is expected to remain at 1.5% this year. This, it said, will be fully financed through capital inflows, creating a balance of payments surplus and adding USD 673 million to reserves.
Findings from the CBK’s July 2025 Market Perceptions Survey showed optimism in the currency’s outlook. About 77% of banks and 71% of non-bank respondents expect the exchange rate to stay steady or even strengthen in the short term, citing better foreign exchange inflows, external support, and stable macroeconomic conditions.
“Improved remittances, strong export earnings, and a stable economic environment have kept the shilling steady,” Dr. Thugge noted.
Still, the CBK warned of possible risks such as rising import bills, debt repayment pressures, and unpredictable global oil and commodity prices that could strain the currency.
Since August 2024, the shilling has traded within a narrow band, helping keep inflation low and allowing businesses to plan with more certainty. The CBK said it will continue monitoring local and global trends closely and take action when necessary to maintain stability and support growth.
