The Kenyan shilling has shown strong performance against the United States dollar in recent months, holding its position as one of the world’s best-performing currencies.
Speaking on Wednesday, August 13, during the Monetary Policy Committee (MPC) meeting, Central Bank of Kenya (CBK) Governor Kamau Thugge explained that the shilling’s stability has mainly been supported by steady inflows of foreign exchange from three key areas — diaspora remittances, offshore banks, and agricultural exports such as coffee and tea.
Governor Thugge noted that remittances from Kenyans living and working abroad have been a major pillar of support for the local currency.
He projected that these inflows would rise by about 6 per cent by the end of the year, with a 5.8 per cent increase expected in the near term. This growth, he said, will likely keep the shilling stable in the coming months.
“Our currency has remained steady because of healthy foreign exchange inflows from diaspora remittances, offshore banking institutions, and agricultural exports like coffee. We are confident that this trend will hold in the short term,” Thugge remarked.
The CBK governor also revealed that a recent market perception survey carried out by the Central Bank indicated growing optimism about the shilling’s outlook.
According to the survey, 77 per cent of banks and 71 per cent of non-bank respondents believe the shilling will strengthen further, largely due to improved remittances and stronger investor confidence in Kenya’s economy.
However, he acknowledged that a small group of respondents expect mild weakening in the local currency, citing foreign exchange pressures from higher imports and scheduled external debt repayments.
As of Thursday, August 14, the Central Bank quoted the shilling at Ksh129.23 against the US dollar, the same rate it posted the previous day.
The local unit has remained relatively steady for several months now, after gaining ground in the first half of 2024. This earlier stability was largely driven by increased dollar inflows from government bond sales.
In June of the previous year, the Kenyan shilling was recognised as the best-performing currency in the world after it strengthened by 17 per cent against major global currencies, including the US dollar, the euro, and the British pound.
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