The Kenyan shilling continued to exhibit stability against most major and regional currencies at the end of July 2025, with exchange rates reflecting a balanced forex market environment supported by robust remittance inflows, improved foreign reserves, and effective monetary policy.
According to data released by the Central Bank of Kenya (CBK), the shilling traded at approximately 129.24 units to the US dollar, maintaining the same level as in early July.
This trend signals that demand and supply for dollars in the domestic market have remained relatively balanced over the past month.
Against the British pound, the shilling appreciated slightly to trade at around 175.90 compared to 177.50 at the beginning of the month. The local currency also remained steady against the euro, averaging 151.80, while marginal gains were recorded against the Japanese yen and Chinese yuan.
The relative firmness of the shilling has been attributed to strong diaspora remittances, which crossed the 5 billion dollar mark annually, and healthy forex reserves estimated at around 11 billion dollars, equivalent to about five months of import cover.
In the East African region, the shilling maintained stability against neighboring currencies. It exchanged at 20.40 against the Tanzanian shilling, 27.80 against the Ugandan shilling, 11.10 against the Rwandan franc, and 23.10 against the Burundian franc.
Analysts say this reflects synchronized monetary strategies across the region and subdued speculative activity in the local forex market.
The stability of the shilling comes after a volatile 2023 and early 2024, when the currency experienced sharp depreciation, reaching historic lows of 160 to the dollar before making a strong comeback.
The strengthening was largely driven by policy reforms, including the liberalization of the foreign exchange market and disciplined interest rate management. The CBK has maintained its policy rate at 9.75 percent to help contain inflation and support the shilling.
While the current levels are seen as sustainable in the short term, some economists have warned that a slowdown in export growth and potential external shocks could trigger renewed pressure on the currency.
However, the World Bank recently ranked the Kenyan shilling as one of Africa’s best-performing currencies in 2024, offering confidence in its medium-term outlook.
Market forecasts suggest that the shilling may remain in the range of 129 to 132 per dollar over the next quarter, barring any major shocks in global commodity prices or capital flows.
As such, the stability of the local currency is expected to continue offering relief to importers and help moderate inflationary pressures for Kenyan households and businesses.
Written By Ian Maleve
