In a remarkable turn of events, the Kenyan shilling has shown significant strength against the American dollar, receiving a boost from increased dollar inflow from global lenders and the government’s redemption of the Eurobond.
Recent observations by Capital Business reveal that Equity Bank is purchasing one US dollar for Sh135.8 and selling at Sh140.8, while Stanbic Bank is buying at Sh135 and selling at Sh145. Major forex bureaus in Nairobi also reflect the local unit’s improved standing against the USD, with Satellite Forex Bureau buying one USD at Sh135 and selling at Sh147, and Sky Forex Bureau quoting buying and selling rates at Sh120 and Sh148 respectively.
This surge in the Kenyan currency follows the government’s acquisition of $1.5 billion to settle the previous Eurobond maturing on June 24, 2024. The redemption of part of the Eurobond has assuaged investor concerns, leading to increased investment in the country. Furthermore, the approval of $942.2 million for Kenya by the Board of the International Monetary Fund (IMF) under the Extended Fund Facility (EFF) and the Extended Credit Facility (ECF) has provided an additional impetus. Kenya has already accessed $624.5 million from this facility.
During the recent monthly post-Monetary Policy Committee (MPC) meeting, CBK Governor Kamau Thugge emphasized that the stabilization of the local currency has gained momentum. Governor Thugge expressed confidence in the ongoing stability, attributing it to the Central Bank’s decision to raise the Central Bank Rate from 12.5 per cent to 13 per cent. The Central Bank of Kenya reiterated its commitment to safeguarding the local unit from further depreciation, particularly because the shilling has exceeded its intended equilibrium target range.
