The World Bank has listed the Shilling as the best-performing currency in Sub-Saharan Africa.
In its Africa Pulse Report released in April 2024, it was noted that the Kenyan currency registered the highest appreciation rate this year at 16 per cent.
According to the financial institution, the appreciation of the Shilling results from the recent monetary policies introduced by the Central Bank of Kenya (CBK) which have seen the demand for the local currency rise in recent months.
On the other hand, Kenya's activity in the Eurobond market in February was also reported to have helped in making the Shilling gain some ground against the Dollar.
One currency that is also gaining ground alongside that of Kenya is the Zambian Kwacha.
"The Kenyan shilling is the best-performing currency in the subcontinent as it recorded an appreciation of 16 per cent so far this year. After strengthening by 14 per cent by mid-February, the Zambian kwacha has lost some ground and recorded a year-to-date appreciation of 2.4 per cent as of mid-March.
"In both cases, the monetary authority hiked interest rates to defend their currencies. The Bank of Zambia additionally raised commercial banks’ reserve ratios. In Kenya, securing funds to repay its Eurobond falling due in June 2024 restored confidence and increased the demand for local currency," read the report in part.
Another currency that has appreciated this year is the Malagasy Ariary (Madagascar).
Meanwhile, the report also revealed that other currencies were still depreciating owing to several factors including; deficiencies in the foreign reserves and the ballooning debt facing most African countries.
Among the countries whose currencies have depreciated significantly include the Nigerian currency.
"This year, the Nigerian Naira has continued weakening, with a year-to-date depreciation of about 41 per cent in the official market as of mid-March.
"The weakening of the Naira resulted from a backlog of accumulated foreign exchange demand on the official market due partly to limited Dollar flows as foreign investments into the country and its crude oil export receipts have declined," read the report in part.
