KENYAN SHILLING MAINTAINS STABILITY AGAINST US DOLLAR FOR 28 MONTH
The Kenyan shilling has traded around KSh129 against the US dollar for nearly 28 months, recovering from its 2024 lows as foreign exchange reserves and dollar inflows strengthen.
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The Kenyan shilling has maintained relative stability against the US dollar for nearly 28 months, trading largely between KSh128 and KSh130 after recovering from a sharp depreciation that saw it fall to about KSh160 in early 2024.
As of October 29, 2026, the Central Bank of Kenya (CBK) quoted the shilling at KSh129.96 against the dollar, reflecting the narrow trading range that has characterised the currency market since its recovery in mid-2024.
The prolonged stability marks a significant turnaround from January 2024, when the shilling weakened to approximately KSh160.75 against the dollar, increasing the cost of imports and placing pressure on businesses with foreign currency obligations.
The recovery has been supported by improved foreign exchange inflows from diaspora remittances, tourism, tea and horticultural exports, alongside monetary policy measures and improved external financing conditions.
CBK Governor Kamau Thugge has previously attributed the shilling's performance to improved balance-of-payments conditions, stronger foreign exchange inflows and measures taken to restore stability in the currency market.
Kenya's foreign exchange reserves have also strengthened, providing a buffer against external shocks. The CBK reported reserves of US$14.74 billion as of October 29, equivalent to 5.9 months of import cover, comfortably above the statutory minimum of four months.
The stable exchange rate has provided businesses with greater predictability when importing goods, servicing foreign currency obligations and planning transactions. Importers of fuel, machinery, pharmaceuticals and industrial inputs have faced less exposure to the sudden exchange-rate movements experienced during the 2024 currency crisis.
For instance, an importer paying US$100,000 would have required approximately KSh16 million when the dollar traded at KSh160. At the current rate of KSh129.96, the same transaction would cost about KSh13 million, representing a difference of roughly KSh3 million.
The government has also benefited from greater predictability in the shilling value of external debt repayments, although the underlying dollar-denominated debt obligations remain unchanged.
Despite the currency's recovery, however, the stability has not necessarily translated into lower prices for consumers.
Kenya's annual inflation rose to 7.3 per cent in October 2026, up from 6.8 per cent in September, according to the latest CBK bulletin. Rising food and transport costs contributed to the increase, highlighting the continued pressure on household budgets.
Economists have noted that exchange-rate stability can help contain imported inflation, but the prices consumers pay are also influenced by international commodity prices, taxation, transport expenses, production costs and domestic distribution margins.
The shilling also remains exposed to external risks, including fluctuations in global oil prices, changes in international capital flows and movements in export earnings, which could affect the country's foreign exchange supply.
For now, the currency's performance marks a notable improvement from the volatility experienced in early 2024. However, whether that stability will translate into sustained relief for households will depend on broader economic conditions and the movement of prices across the economy.
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Written by FRANKLINE NYANDORO
Reporter and staff writer at Getembe News.
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