Treasury: Kenya Shilling Could Be at KSh 100 Per Dollar Without CBK’s Market Interventions
The National Treasury has provided insights into the actual value of the Kenyan shilling following its year-long stability against both regional and global currencies.
Treasury Principal Secretary (PS) Chris Kiptoo revealed that the local currency might have strengthened to KSh 100 per US dollar had the Central Bank of Kenya (CBK) not been purchasing dollars from the market.
Over the past year, the shilling has appreciated significantly, rising from a low of KSh 160 per US dollar in January 2024 to an average of KSh 129 per US dollar in 2025.
Impact of CBK’s Dollar Purchases
Kiptoo explained that CBK’s involvement in the forex market has influenced the exchange rate stability.
“The shilling has appreciated from a low of KSh 160 to now KSh 129 per US dollar. That has been good stability for the last one year. The Central Bank has been buying dollars over the same period, you can imagine if it was not going to the market to buy. The shilling would have been stronger, perhaps trading at KSh 100 per dollar,” said Kiptoo.
Recent CBK data showed that as of Thursday, February 20, 2025, the shilling was trading at KSh 129.45 per US dollar.
Factors Strengthening the Shilling
CBK Governor Kamau Thugge attributed the shilling’s appreciation to robust foreign currency reserves, which reached $9.4 billion (KSh 1.2 trillion) in February 2025.
Additionally, Kenya experienced a rise in diaspora remittances, with inflows in January 2025 amounting to $427.4 million (KSh 55.2 billion), compared to $412.4 million (KSh 53.3 billion) in January 2024.
FXPesa Kenya market analyst Rufas Kamau echoed these sentiments, stating that strong foreign currency inflows have contributed to the local currency’s resilience.
“The USD inflows, which signal strong remittances and improved foreign direct investment, could strengthen the Kenya shilling further below KSh 120 per US dollar,” Kamau noted.
Stronger Shilling and Economic Stability
Meanwhile, Treasury Cabinet Secretary (CS) John Mbadi highlighted the government’s progress in debt management and fiscal sustainability.
He stated that a stronger shilling, alongside fiscal consolidation efforts, had helped reduce the present value of debt to Gross Domestic Product (GDP) from 68.7% in 2023 to 63.0% in 2024.
The Treasury confirmed that the Kenyan shilling appreciated from KSh 160.8 per US dollar in January 2024 to KSh 129.4 per US dollar in January 2025, maintaining stability within the KSh 128-130 range.
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Treasury: Kenya Shilling Could Be at KSh 100 Per Dollar Without CBK’s Market Interventions
