The Kenyan Shilling continued its steady streak against the United States Dollar on Monday amid concerns of a potential weakening because of recent political tensions that gripped the country.
The local currency’s stability was chiefly attributed to inflows in foreign exchange currency reserves in the Central Bank of Kenya (CBK). The shilling further remained strong despite Friday being declared a public holiday for DP Kithure Kindiki's swearing-in ceremony.
Tourism and tea exports boosted the foreign exchange currency reserves further steadying the Kenyan shilling coupled with the decrease in prices of oil in the global markets.
According to forex traders, supply from tourism and tea exports matched the demand from the manufacturing and the oil sectors.
The Shilling closed at Ksh128.50/Ksh129.50 to the dollar at the close of the markets on Thursdays. Friday was declared a public holiday in Kenya.
Tourism continued to play a pivotal role in earning the central bank's foreign exchange currency reserves. As people gear up for the December holidays, tourism has gradually resulted in increased foreign currency as visitors exchanged their dollars for Kenyan shillings to spend in the country.
The consistent inflow of foreign cash mainly from tourism and tea exports has greatly steadied the Kenyan Shilling by offsetting the negative sentiments that followed after weeks of anti-government protests that led to a delay in the disbursement of the International Monetary Fund (IMF) loan.
The Kenyan Shilling has seen remarkable stabilisation against the dollar, now standing in the range of Ksh129 compared to Ksh162 at the beginning of 2024.
This currency stability is a major advantage, especially in a global economic landscape that faces persistent volatility.
This has led to greater predictability for import costs, which has a ripple effect across various sectors. Importers of essential goods, such as fuel, pharmaceuticals, and industrial machinery can now plan and budget more effectively, as stable currency rates reduce unforeseen expenses.
For the better part of October, the Kenyan Shilling traded in the range of Ksh127 – Ksh 133 against the dollar.
Analysts anticipate the steadying to continue as the country heads into the December season which will spur tourism positively even as the United States is expected to finalize its elections this week
Since February this year, the shilling has maintained an incredible streak against major currencies globally, strengthening by 17 per cent, according to data shared by the Central Bank of Kenya.
Frequent interventions by the central bank also boosted the shilling as the regulator stepped in to reduce the volatility of the Kenyan currency and reduce pressure on the foreign exchange.
