Sharp Daily
No Result
View All Result
Monday, August 4, 2025
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
Sharp Daily
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
No Result
View All Result
Sharp Daily
No Result
View All Result
Home Investments

Why the Kenyan Shilling remains strong despite earlier predictions

Hezron Mwangi by Hezron Mwangi
December 6, 2024
in Investments
Reading Time: 2 mins read

Earlier this year, experts warned that the Kenyan shilling was due to weaken further compared to the US dollar. Some predicted that it would slide past the KES 200.0 mark against the dollar, this was in the aftermath of historic gains, with the Shilling gaining by 18.8% to 130.5 against the dollar as of 8th April 2024 from KES 160.8 recorded at the end of January this year . The main reason experts saw this as a temporary increase was because Kenya was due to pay its 10-year Eurobond that matured June 2024. However, 9 months later, the shilling remains as strong as it was before June 2024.

In order to understand why there was a gain, one has to understand why there was a slide in the first place. In 2021 and 2022 the government, in an effort to shield local companies from international pressures caused by the Covid-19 pandemic, used the Central Bank of Kenya (CBK) forex reserves in an effort to support the exchange rate.

The government used upward of USD 2.0 billion, but this was untenable as foreign reserves began to fall sharply towards the statutory minimum requirement of maintaining at least 4 months of import cover.

In 2022 the government decided to stop supporting the Shilling and, in its place, came up with a Government to Government (G2G) deal that would enable fuel importers to use Kenyan shillings. At the same time, the US Federal Reserve was in the middle of an aggressive round of monetary policy tightening, with the Fed increasing their policy rate by 25 bps to 5.25% in March 2022 from 5.0%. All this, coupled with the expected Eurobond repayment in 2024, made investors and companies to head for the exit and sell their shillings in preparation for tough times ahead.

RELATEDPOSTS

Kenyan Shilling declines against US Dollar once more

April 22, 2024

Optimism surrounds the shilling as the government adopts mitigating measure

April 12, 2024

However, in February, the country successfully issued a new Eurobond worth USD 1.5 billion (KES 194.2 billion) to buy back the inaugural one that matured in June 2024. The Shilling started to gain against the dollar and in September the Fed started lowering rates this provided breathing space for the shilling.

The experts were not wrong in predicting doom for the Kenyan shillings, it is only that they didn’t  factor in the chain of fortunate events that followed, we cannot say the same for the Nigerian Naira.

Previous Post

Exploring the untapped potential of agricultural tech investments

Next Post

Ruto reaffirms commitment to corruption-free healthcare

Hezron Mwangi

Hezron Mwangi

Related Posts

1049795356
Analysis

Maximizing Your Pension Contributions

August 1, 2025
Analysis

Kenya’s Interest Rate Cut: A Turning Point for Growth

July 31, 2025
Analysis

Transferring Your Retirement Benefits Between Pension Schemes in Kenya

July 23, 2025
Investments

Invest in stability: introducing the Cytonn USD money market fund

July 18, 2025
Analysis

Park your money where it grows: Why more Kenyans are turning to Cytonn Money Market Fund

July 16, 2025
Analysis

Nvidia becomes the first company globally to hit USD 4.0 trillion market value

July 10, 2025

LATEST STORIES

EABL posts 12.2% profit surge, strengthens regional footprint despite rising illicit trade

August 1, 2025
1049795356

Maximizing Your Pension Contributions

August 1, 2025

The functional role of narrative in financial markets

August 1, 2025

Tanzania’s protectionist shift and what it means for Kenyan entrepreneurs and regional trade

July 31, 2025

Kenya’s Interest Rate Cut: A Turning Point for Growth

July 31, 2025

Why Syokimau, a satellite town is attracting real estate investors

July 31, 2025

Shri Krishana Overseas lists on NSE

July 25, 2025

Why young professionals should care about pensions

July 23, 2025
  • About Us
  • Meet The Team
  • Careers
  • Privacy Policy
  • Terms and Conditions
Email us: editor@thesharpdaily.com

Sharp Daily © 2024

No Result
View All Result
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team

Sharp Daily © 2024