The Kenyan shilling held relatively steady against major currencies on August 6, 2025, although it continued to face pressure from persistent demand for the US dollar and other hard currencies for imports and external debt obligations.
The currency traded at an average rate of 129.88 against the US dollar, showing a slight weakening from last week, largely driven by corporate demand and moderate foreign investor outflows from the fixed-income market.
Against the euro, the shilling traded at approximately 142.35, reflecting a mild gain as the European currency softened on global markets following weaker-than-expected economic data from the eurozone.
The local unit was also firmer against the British pound, exchanging at around 165.72, bolstered by a temporary pullback in the pound as markets digested the Bank of England’s latest rate policy update.
However, the shilling weakened marginally against regional currencies such as the Tanzanian shilling and the Ugandan shilling, influenced by stronger intra-East African trade flows and settlement demand from cross-border businesses.
The Kenyan currency traded at 17.23 against the Tanzanian shilling and 33.71 to the Ugandan shilling.
Performance against Asian currencies was mixed. It stood at 18.85 to the Chinese yuan, reflecting continued trade imbalances with China and strong demand for consumer goods and capital equipment.
Against the Japanese yen, the shilling remained flat at around 90.41, supported by balanced trade dynamics in that corridor.
The Central Bank continued to monitor the forex market closely, though it was not active in any visible intervention during the session.
Reserves have declined in recent weeks due to scheduled external debt repayments, which has somewhat limited the CBK’s room for active currency stabilization.
Forex dealers indicated that the market remains cautious, with expectations of increased volatility ahead of upcoming fiscal disclosures and a new sovereign debt auction.
Remittances and export receipts, especially from tea and horticulture, provided some support for the local unit, though not enough to drive a significant rally.
Traders and importers are expected to closely watch global commodity prices, monetary policy updates from developed economies, and domestic fiscal signals, all of which are expected to influence the direction of the shilling in the coming days.
Written By Ian Maleve
