The Kenyan shilling on Thursday, November 7, remained steady against international major currencies like the dollar, particularly after a day that it was expected to have a slight dip following the US elections.
The shilling's steady path against the dollar was particularly aided by foreign exchange supply from tourism that has since picked up following an earlier destabilization by the post-COVID and election events.
Indicative rates from the Central Bank of Kenya(CBK), showed that the shilling traded at Ksh129.1 against the US Dollar on Thursday, remaining at around the Ksh129 mark where it has traded over the last month. On Wednesday, the shilling edged up against the dollar, gaining Ksh0.05 or 0.02 per cent, defying the global trend as the US dollar strengthened.
Tea exports enabled the Kenyan shilling to stay afloat even as reports emerged that there have been excess tea reserves that are yet to be exported followed by delays from tax clearing agencies.
The tourism sector continued to sustain the local currency with people gearing up for the December holidays, this is largely due to increased foreign currency as visitors continue to exchange their dollars for Kenyan shillings to spend in the country.
According to CNBC Africa, traders reported that the manufacturing sector was instrumental in strengthening the shilling, as the demand continued to soar despite the shock generated from other stock markets.
The oil sector continued to contribute to the strengthening of the Kenyan currency as fuel prices remained fairly stable with the easing tensions in the Middle East.
The stability in oil prices over the recent months despite the tensions in the Middle East has been greatly aided by the decision of the Organization of the Petroleum Exporting Countries(OPEC) to delay plans to announce a hike in production.
OPEC retained the 2 per cent rise that has been in place and will consider making an adjustment when they sit in December.
Earlier, it was thought that the shilling would have followed the trend with the stock markets that moved sideways with the uneasy calm that settled over currencies and bonds as investors waited for the United States to elect a new leader.
The shilling has continued to remain strong for the better part of the year after bouncing from an unpromising record at the start of the year.
The local currency’s stability has also been attributed to inflows in foreign exchange currency reserves in the Central Bank of Kenya (CBK) and increased foreign diaspora remittances.
CBK on October 25, in a report, announced that the remittance inflows in September 2024 totalled USD418.5 million (Ksh54 Billion) compared to USD340.4 million (Ksh44 Billion) in September 2023, representing an increase of 22.9 per cent.
