- The Kenyan shilling exchanged at KSh 129.23 per US dollar on Thursday, May 22, compared to KSh 129.25 per US dollar on Thursday, May 15
- The shilling’s strength was boosted by the increase in foreign exchange reserves, which rose from KSh 1.31 trillion on May 15 to KSh 1.33 trillion on May 22
- Against the Tanzanian shilling (TSh), the local currency slightly appreciated, strengthening from TSh 20.78 on May 16 to TSh 20.86 on May 22
Japhet Ruto, a journalist at TUKO.co.ke, brings more than eight years of experience in finance, business, and technology, offering deep insights on economic trends in Kenya and globally.
The Kenyan shilling has remained stable against the United States (US) dollar and currencies in the East African Community (EAC).
Source: Getty Images
How the Kenyan shilling is performing against the US dollar
In its weekly bulletin highlighting the latest monetary and financial developments, the Central Bank of Kenya (CBK) revealed that the shilling exchanged at KSh 129.23 per US dollar on Thursday, May 22, compared to KSh 129.25 per US dollar on Thursday, May 15.
The shilling’s strength was boosted by the increase in foreign exchange reserves, which rose from $10,164 million (KSh 1.31 trillion) on May 15 to $10,308 million (KSh 1.33 trillion) on May 22.
“The Kenyan shilling remained stable against major international and regional currencies during the week ending May 22. It exchanged at KSh 129.23 per US dollar on May 22, compared to KSh 129.25 per US dollar on May 15. The usable foreign exchange reserves remained adequate at $10,308 million (4.6 months of import cover) as of May 22. This meets the CBK’s statutory requirement to endeavour to maintain at least 4 months of import cover,” CBK stated.
How the Kenyan shilling is performing against EAC currencies
During the week under review, the Kenyan shilling showed relative stability with minor variations against East African currencies
Against the Tanzanian shilling (TSh), the local currency slightly appreciated, strengthening from TSh 20.78 on May 16 to TSh 20.86 on May 22.
In contrast, the Kenyan shilling remained stable against the Ugandan shilling, maintaining a consistent rate of 28.30 throughout the week, showing no significant fluctuation.
Against the Rwandan franc (RWF), the Kenyan shilling maintained a stable average rate of 10.95.
Similarly, the Kenyan shilling saw a stable rate against the Burundian Franc (BIF), moving from 23.02 BIF on May 16 to 23.03 BIF on May 22.
Source: Getty Images
How was the money market and government securities?
The week ending May 22 saw the money market stay liquid.
Commercial banks’ excess reserves stood at KSh 21.2 billion, in line with the 3.25% cash reserves requirement (CRR).
The average interbank rate rose marginally from 9.86% to 9.87%, while the average value exchange decreased to KSh 3.6 billion from KSh 9.4 billion in the previous week.
Why shilling remained at 129 for long
The Kenyan shilling should continue to trade at an average of 130 per unit against the US dollar, according to Treasury Cabinet Secretary (CS) John Mbadi.
Mbadi clarified that although a higher shilling lowers the cost of imports, it may discourage exports, which would lower profits for local exporters.
A drop in exports might affect foreign exchange reserves and increase the nation’s economic vulnerability, the CS pointed out.
Source: TUKO.co.ke
