The Kenyan Shilling weakened against several major global currencies during the third quarter of 2025, according to the latest GDP and Macroeconomic report released by the Kenya National Bureau of Statistics.
While the shilling posted a marginal gain of 0.2 per cent against the U.S. Dollar, it lost significant value against the Euro, Pound Sterling, Japanese Yen, and South African Rand, declining by 6.2 per cent, 3.6 per cent, 0.7 per cent, and 1.6 per cent, respectively.
Against regional currencies, the shilling showed resilience, appreciating by 5.8 per cent against the Tanzanian Shilling and 4.1 per cent against the Ugandan Shilling during the same period.
The report indicates that the mixed performance of the shilling comes amid moderate inflation, which rose slightly to 4.42 per cent in Q3 2025 from 4.08 per cent in the corresponding quarter of 2024. The increase was largely driven by rising food and soft drinks prices.
Monetary policy changes also played a role in the shilling’s performance. The Central Bank Rate (CBR) was lowered from 9.75 per cent in July to 9.50 per cent in August and September 2025, compared to 12.75 per cent in September 2024. This move, according to policy experts and the Central Bank of Kenya (CBK), was aimed at stimulating lending to the private sector.
The report further notes that foreign exchange reserves strengthened, with net foreign assets rising by 2.7 per cent to Ksh948.2 billion, driven by increased holdings at the Central Bank of Kenya.
Despite these gains, the shilling’s depreciation against global currencies may increase the cost of imported goods, including fuel, machinery, and electronics, potentially affecting consumer prices.
The current account deficit widened sharply, growing from Ksh43.5 billion in Q3 2024 to Ksh135.3 billion in Q3 2025, which could also exert pressure on the currency in the coming months.
Meanwhile, the Nairobi Securities Exchange (NSE) saw strong performance during the same period, with the NSE 20 Share Index rising from 1,776 points in September 2024 to 2,973 points in September 2025, reflecting increased investor activity despite currency volatility.
Sectoral growth in the economy remained steady, with agriculture, construction, manufacturing, transport, and financial services all expanding, contributing to an overall GDP growth of 4.9 per cent in Q3 2025, up from 4.2 per cent in Q3 2024.
The Kenya Shilling remained stable against major international and regional currencies for most of last year. According to the latest data from the CBK, the shilling traded at Ksh129.01 per U.S. dollar on December 31, 2025, compared to Ksh129.00 per U.S. dollar on December 24.
This stability during the final week of the year was supported by strong foreign exchange reserves, which stood at Ksh1.6 trillion (USD12,394 million) (5.3 months of import cover) as of December 31.
