NAIROBI, Kenya – The Kenyan shilling has climbed to its strongest level in 17 months, extending a steady recovery that has reshaped currency markets and eased pressure on imports and public debt.
The local currency traded at 128.96 to the US dollar as markets opened on Tuesday, strengthening from an average of 129 where it had largely hovered for more than a year. The performance marks the shilling’s best showing since mid-2024.
The latest gains cap a gradual retreat from the 130 mark that began in late July 2024, following months of consistent appreciation after the currency hit a historic low of 160 in early February last year.
Analysts attribute the sustained stability to a mix of improved investor sentiment and stronger macroeconomic fundamentals.
A key turning point was the government’s $2 billion Eurobond buyback programme, under which Kenya repaid $1.5 billion in February, boosting confidence in the country’s debt management strategy.
The National Treasury says the currency’s resilience has also been supported by rising foreign exchange inflows, led by robust diaspora remittances, strong export earnings and a rebound in tourism.
These inflows have helped shore up the country’s external buffers. Official data shows Kenya’s foreign exchange reserves have remained above $10 billion since May 2025, translating to import cover of between 4.7 and 5.3 months, comfortably above the statutory minimum of four months.
The stronger shilling is expected to offer some relief to the broader economy. Since import costs are directly linked to the exchange rate, the sustained appreciation could help stabilise prices of imported goods, including fuel and industrial inputs.
Compared to last year’s all-time low, the currency has gained about 32 shilling units, representing an appreciation of roughly 20 per cent.
At current levels, importers are spending about Sh32 less per dollar than they did at the peak of the currency’s weakness.
A firmer exchange rate is also expected to ease pressure on Kenya’s public debt, much of which is denominated in dollars.
The World Bank, in its latest Kenya Economic Update, says the country’s external debt profile has improved in the short term, supported by the shilling’s appreciation and government efforts to reduce refinancing risks.
Whether the gains can be sustained will depend on continued forex inflows, fiscal discipline and global market conditions, but for now, the shilling’s rebound marks a rare period of stability after years of volatility.
