Kenyan Shilling Steadies After Taking Plunge Last Week

The Kenyan shilling remained steady on Tuesday, November 19, against the dollar after dipping for the first time in weeks last week on Thursday.
The shilling remained unchanged trading at 128.75/129.75 against the Dollar, the same as Monday’s closing rate. This is according to data shared by the London Stock Exchange Group (LSEG), a data service provider.
One trader attributed the steadiness to dollar inflows from exports matching demand from the manufacturing sector.
“The shilling is expected to stay stable towards the end of the month as companies convert dollars into local currencies to make statutory payments,” one trader told Reuters. 

A photo depicting a person holding Kenya Shilling notes and US Dollar notes

Photo

Janta Kenya

Sustained 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, occasioned by delays from tax clearing agencies.
Similarly, the tourism sector has continued to play a pivotal role in boosting foreign currency inflows. It is a result of people gearing up for the December holidays with a hike in foreign visitors visiting the country.
Diaspora remittances from Kenyans abroad enhanced dollar inflows partly aided in easing pressure on the local shilling.
The oil sector also played a crucial role in strengthening the Kenyan currency as fuel prices remained fairly stable with the easing tensions in the Middle East.
The East African currency depreciated slightly in the last week after jitters of Donald Trump’s presidential victory in the US.
However, 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.
From an annual perspective, the Kenyan shilling gained by an impressive 17 per cent against global peers, according to a recent report by the Central Bank of Kenya (CBK).
As of November 7, Kenya’s forex reserves peaked at USD 9.32 billion (about Ksh1.2 trillion), which was the highest recorded this year. The amount was a stark contrast to figures recorded in January this year when Kenya’s forex reserves stood at USD 6.82 billion (about Ksh879.7 billion at current exchange rates).
The government’s decision to offset the Ksh310 billion (USD2 billion) Eurobond played a huge role in steadying the local currency for the better part of 2024, as the move attracted more investors backing on the country’s debt-repayment ability.

A person holding 1,000 Kenyan shillings notes

Photo

Reuters