The Central Bank of Kenya has explained why the Kenyan
shilling has continued to soar against the dollar.
CBK Governor Kamau Thugge said the stability has strengthened
because of diversified foreign exchange inflows.
As of August 12, 2025, the Kenyan Shilling is being exchanged
at 129 per US dollar according to the Central Bank of Kenya.
“The Kenyan shilling has remained stable, supported by
diversified foreign exchange inflows from Diaspora remittances, offshore banks,
coffee, and other export items. We expect this stability to continue into the
near term,” Governor Thugge said during the Monetary Policy Committee (MPC).
Governor Thugge said findings from the July 2025 Market
Perceptions Survey showed 77 per cent of bank respondents and 71 per cent of non-bank
respondents expect the exchange rate to strengthen in the near term.
They believe that improved forex inflows, external support,
and stronger investor sentiment driven by low inflation and stable
macroeconomic conditions will help the shilling to continue stabilising.
“We took a market perception survey regarding the exchange
rate and most respondents, 77 per cent of the banks and 71 per cent of non-bank
respondents to the July 2025 survey, expect the exchange rates to remain stable
or strengthen,” he said.
He further said that some respondents expect some pressure
from increased imports, external debt service payments and volatile
oil and commodity prices.
The Kenyan Shilling has continued to significantly gain
against the dollar.
In 2024, the US dollar had risen from an average exchange
rate of Sh125 against the shilling in the first quarter of 2023 to Sh162 posted
in January 2024.
On January 15, 2024, the shilling officially crossed 160 unit
points against the US dollar, the lowest level on record.
The Central Bank of Kenya blamed the depreciation of the
shilling on the $2 billion (Sh300 billion) Eurobond.
The depreciation made imports more expensive while at the
same time pushing up Kenya’s debt.
However, the country successfully issued a new Eurobond worth $1.5 billion (Sh238 billion) to buy back the inaugural one due on June 24.
