Kenya’s economy is showing signs of recovery as the local currency, the Kenyan shilling, posted its strongest performance in months against the US dollar. The Central Bank of Kenya (CBK) reported that the shilling gained ground amid increased foreign inflows, improved investor confidence, and rising remittances from the diaspora.
As of Friday, the USD/KES exchange rate stood at Sh142.80, compared to Sh145.20 last week — marking a steady appreciation that analysts attribute to the Central Bank’s tightened monetary policy and improved export receipts.
💹 What’s Driving the Recovery?
Economists point to several key factors:
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Increased Tea and Horticultural Exports: Global demand for Kenyan produce has boosted foreign earnings.
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Diaspora Remittances: Kenya continues to record record-high remittance inflows, supporting the shilling.
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Investor Confidence: The recent stabilization of fuel prices and easing inflation have attracted new foreign investments.
Dr. Kamau Thugge, CBK Governor, noted that the country’s forex reserves now stand at $7.8 billion, equivalent to 4.6 months of import cover — the highest in nearly a year.
💬 Expert Insight
“Kenya’s currency outlook remains cautiously optimistic,” said economist James Mwangi, adding that “if inflation stays contained and exports continue performing, the shilling may hold below Sh145 for the rest of the quarter.”
However, he warned that global oil prices and geopolitical tensions could still influence future currency trends.
🏦 What It Means for Businesses and Consumers
For Kenyan importers and manufacturers, the stronger shilling offers a temporary relief on the cost of imported goods and raw materials. Consumers may also enjoy lower fuel and transport costs if the trend continues.
Meanwhile, exporters will need to balance currency gains against profit margins, especially in the agricultural sector.
📊 Outlook
The CBK is expected to maintain a cautious monetary stance, ensuring stability while encouraging credit flow to the private sector. If global conditions remain favorable, Kenya could see sustained currency resilience through early 2026.
