The National Treasury detailed factors that had made the Shilling to stabilise against major international currencies such as the Dollar and the Euro.
In its third Quarterly Economic and Budgetary Review, the Treasury credited the recent stabilisation of the Shilling to three major factors including resilient diaspora remittance, adequate foreign reserves and export earnings.
As detailed in the report, Kenyans living abroad contributed to stabilising the Shilling through the money they send back home for their families and investments.
Given that the remittances are usually in foreign currencies (mostly Dollars), there were enough foreign reserves.
Therefore, the country has been able to meet the demand for foreign currencies that are needed by importers.
On the other hand, it was noted that the country's foreign reserves were also boosted by the revamped export business.
"Against the Euro, the Shilling strengthened by 18.0 per cent to exchange at Ksh142.7 by the end of March 2024 compared to Ksh173.9 by the end of January 2024.
"Against the Sterling Pound, the Kenyan Shilling strengthened by 18.3 per cent to exchange at Ksh166.6 compared to Ksh203.8 over the same period in 2023," read the report in part.
In comparison to the Dollar, the National Treasury noted that the Shilling strengthened by 5 per cent between the 12 months leading to March 2023.
"The appreciation of the Kenyan Shilling is due to the impact of de-risking of the 2024 Eurobond through 1.5 billion Dollars issuances thereby removing the settlement risk but also forex inflows from the Government infrastructure bond of February 2024, which was oversubscribed by 412.4 per cent," read the statement in part.
Benefits of the Stabilisation
Following the stabilisation of the Shilling, the Treasury reported that foreign investors had increased their investments in the country.
This was also witnessed by the growth reported at the Nairobi Securities Exchange (NSE).
"Share Index improved to 1,752 points in March 2024 compared to 1,611 points in March 2023 while Market capitalization also improved to Ksh1,767 billion from Ksh1,740 billion over the same period respectively," Treasury stated.
