Kenya’s currency, the shilling, maintained its upward trajectory against the dollar on Tuesday, reaching Sh139, marking one of its most robust rebounds in recent months.
According to official figures from the Central Bank, the shilling was quoted at Sh139.4919 against the dollar on Tuesday morning, a significant rise from Sh140.4357 recorded on Monday.
On February 15, the shilling had surged by nearly 8 percent, reaching as high as 139.00 against the U.S. dollar, as per CBK data at that time.
The strengthening of the shilling during that period was attributed to increased foreign investments in Kenyan domestic debt and the successful resolution of a $2 billion Eurobond maturing in June.
The sustained rally of the Kenyan shilling indicates a notable reversal for the currency, which was anticipated to depreciate further this year after reaching an all-time high of over 160 against the US dollar.
However, the recent influx of dollar-denominated support, including disbursements from the International Monetary Fund (IMF) and the Trade Development Bank, has contributed to the shilling’s resurgence. The IMF disbursed USD 684 million on January 18, followed by an additional USD 385 million from the Trade Development Bank on January 24.
National Treasury Principal Secretary Chris Kiptoo urged Kenyans holding onto dollars to capitalize on the current opportunity to sell, emphasizing that the risk associated with the Eurobond has diminished. He encouraged individuals to refrain from speculation and engage in productive economic activities.
In January, Central Bank of Kenya Governor Kamau Thugge had signaled the bank’s readiness to intervene to mitigate the volatility that had led to the shilling’s historic lows against the dollar and other major currencies. Thugge suggested that there was potential for the Central Bank to provide support to stabilize the exchange rate moving forward.
