The Kenyan shilling remains firm against global and regional currencies as of July 23, 2025, supported by robust forex reserves and steady inflows from key sectors.
According to the Central Bank of Kenya (CBK), the local currency exchanged at approximately Ksh 129.24 per US dollar by mid-July, maintaining stability throughout the month.
This marks roughly a 13.6 percent year‑on‑year appreciation against the dollar since Q1 2024, when the shilling averaged about Ksh 149.74.
Reserve buffers have likewise strengthened, reaching a record high of USD 11.2 billion (equivalent to 4.9 months of import cover) as of July 10 up by USD 112 million from early July and well above the CBK’s four‑month liquidity requirement.
These reserves have been buoyed by strong diaspora remittances totaling USD 423 million in June (a year‑on‑year increase of 13.8%) and continued export earnings, notably in tea and coffee.
Elsewhere, the shilling shows mixed performance: trading around Ksh 151.77 per euro and approximately Ksh 175.96 per British pound by July 10, with minimal volatility.
Regional peers reflect similar stability: roughly Ksh 27.75 to the Ugandan shilling, Ksh 20.43 to the Tanzanian shilling, Ksh 89.13 per 100 Japanese yen and Ksh 10.64 per Rwandan franc, all indicating consistent values for early Q3 2025.
Kenyan capital markets have welcomed this currency resilience. The shilling’s appreciation of up to 18 percent against the dollar and 17.4 percent against the pound since early 2025 adds confidence.
Analysts note that strong reserves, attractive interest rates (CBK’s base rate at 9.75%), and stable inflation around 3.8% create a favorable backdrop.
Nevertheless, the shilling remains exposed to challenges. Elevated external debt servicing needs, with 67% of Kenya’s external debt denominated in foreign currency, could place pressure on reserves in coming months Moreover, global variables such as oil price fluctuations, shifting monetary policies, and volatile capital flows may disrupt external stability.
Looking ahead, maintaining the current equilibrium depends heavily on sustained remittances, diversifying exports beyond traditional sectors, and cautious macroeconomic management. Economists warn that continued reliance on forex inflows and export stability will be critical to keeping the shilling resilient.
Any slip in reserves or spike in import bills could unsettle an exchange rate that has so far strengthened and stabilized, providing a pivotal juncture for Kenya’s economic planners.
In summary, the Kenyan shilling stands resilient as of July 23, 2025, supported by full reserves, diaspora remittances, solid export earnings, and disciplined fiscal-monetary policy, yet remains vulnerable to external shocks and debt servicing pressures vulnerable to external shocks and debt servicing pressures.
Written By Ian Maleve
