The Kenya shilling maintained its upward trajectory against the dollar, trading at Sh131.50. Commercial banks reported that the shilling had also made notable gains against other key currencies as the market closed on March 27, 2024.
Against the Sterling Pound, commercial banks quoted the shilling at Sh166.54, while it stood at Sh142.67 against the Euro.
Additionally, the shilling was quoted at Sh19.36 against the Tanzania Shilling and Sh29.47 against the Uganda Shilling.
This strengthening trend marks a significant turnaround for the shilling following a prolonged period of depreciation.
On March 12, the shilling rebounded to Sh139, marking the first time the Central Bank of Kenya officially quoted it at this level since June 2023.
During the same period, the shilling also saw gains against other currencies, with the CBK quoting it at 178.85 against the Sterling Pound and 152.32 against the Euro.
The Kenyan Shilling had experienced its weakest point in January 2024, trading at 160 against the dollar. Central Bank of Kenya Governor Kamau Thugge had then expressed plans to intervene to mitigate volatility that had led to the shilling’s decline against major currencies.
Subsequent to these interventions, the shilling’s fortunes began to improve, culminating in its strongest intra-day gain against the US dollar on February 14. This was buoyed by increased investor confidence following significant inflows to pay off the US$2 billion Eurobond.
In November 2023, National Treasury Principal Secretary Chris Kiptoo had encouraged increased investment in foreign exchange earners like the tourism sector to leverage the favorable currency situation.
While exporters may experience reduced earnings, importers stand to benefit from cost savings due to the shilling’s strength against the dollar, which is the primary currency of international trade.
Given Kenya’s reliance on imported manufacturing raw materials, a robust shilling against the dollar is expected to lower manufacturing costs, consequently reducing the prices of goods for consumers.
