Kenyan Shilling Strengthens by 4.1% Against the US Dollar in 2025, but Weakens Against the Euro
The Kenyan shilling recorded a notable improvement in value during 2025, appreciating by 4.1% against the United States dollar, according to new data released by the Kenya National Bureau of Statistics (KNBS).
The currency strengthened from an average exchange rate of Ksh134.82 in 2024 to Ksh129.30 in 2025, reflecting a gradual recovery in the foreign exchange market.
The findings are contained in the KNBS Economic Survey Report 2025, which was published on April 29. The report tracks how the Kenyan shilling performed against major global and regional currencies throughout the year, showing mixed but generally improving trends.
Shilling shows signs of recovery in 2025
According to the report, the Kenyan shilling maintained a steady recovery path over the year. This progress was also reflected in the Trade Weighted Index (TWI), which improved from 130.0 in 2024 to 127.6 in 2025.
This change indicates that the shilling became stronger in real effective terms when compared to a basket of trading partner currencies.
KNBS explained that the strengthening of the currency was largely supported by improved foreign exchange conditions throughout the year.
These improvements were linked to better inflows and overall stability in the external sector, which helped reduce pressure on the local currency.
Economic growth supports currency stability
The report also connected the shilling’s performance to Kenya’s broader economic performance. The economy grew by 4.6% in 2025, although this was slightly lower than the 4.7% growth recorded the previous year.
Despite the positive growth, the figure still fell short of President William Ruto’s earlier target of 5.6%, missing the projection by about 1%.
Even so, the moderate expansion of the economy helped support currency stability and contributed to the shilling’s recovery against major global currencies.
Performance against other global currencies
Beyond the US dollar, the Kenyan shilling also gained value against several other major currencies:
- It appreciated by 1.1% against the British Pound Sterling, moving from Ksh172.27 in 2024 to Ksh170.40 in 2025. This eased costs for Kenyan businesses and traders dealing with the United Kingdom.
- Against the Japanese Yen, the shilling strengthened by 3.1%, showing improved competitiveness in Asian trade transactions.
- The strongest gain was recorded against the Indian Rupee, where the shilling appreciated by 8.0%, offering significant relief to importers trading with India and other Asian markets.
These movements suggest that Kenya’s currency performance was not limited to the dollar alone but reflected broader global gains in several key trade currencies.
Mixed performance within East Africa
Within the East African Community, the shilling’s performance was uneven. Rwanda’s Franc strengthened significantly against the Kenyan shilling by 12.6%, while Uganda’s shilling also showed slight gains.
On the other hand, Tanzania’s shilling weakened against the Kenyan currency during the same period, highlighting differing economic pressures across the region.
Outlook and concerns over global risks
Despite the positive gains, concerns remain over the future stability of the currency. The Governor of the Central Bank of Kenya, Kamau Thugge, recently expressed caution about how the shilling may perform going forward.
Speaking in an interview with Bloomberg on April 9, he noted that global uncertainties, including geopolitical tensions such as the Middle East conflict, could still affect currency stability.
He explained that Kenya had prepared for such risks by building strong foreign exchange reserves. According to him, these reserves are now at a level that helps cushion the economy against sudden shocks.
“We were waiting for this kind of shock,” he said, adding that the accumulation of reserves was intentional to ensure stability. He further emphasized that, despite external pressures, exchange rate volatility remains manageable going forward.
Conclusion
Overall, the 2025 data paints a picture of a Kenyan shilling that is gradually recovering and strengthening against major global currencies, especially the US dollar.
However, the mixed performance within the region and continued global uncertainties suggest that the currency’s future stability will still depend heavily on both domestic economic performance and international market conditions.
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