Kenya Shilling Gains 0.18% in Value Against US Dollar

Despite the Strides in Valuation, Depreciation Concerns Still Linger

The Kenya shilling held steady against the US Dollar, opening Monday at 159.6 units, a slight improvement from its closing position of 159.9 units last Friday, representing a 0.18 percent gain in value.

However, despite these recent gains, the shilling has experienced a significant drop in valuation over the past year.

On a year-to-date basis, the shilling has depreciated by 1.8% against the dollar.

This adds to the substantial 26.8% depreciation recorded in 2023, raising concerns about the currency’s stability.

It comes when Kenya’s foreign exchange reserve has posted a marginal increase.

As of January 12, the reserve stood at US$6.829 billion, up from US$6.775 billion the previous week.

This equates to 3.65 months of import cover, a slight increase from 3.62 months the previous week.

Despite this increase, the reserve remains below the statutory requirement of maintaining at least 4.0 months of import cover.

The performance of the Kenya shilling will continue to be a key area of focus for policymakers and investors alike.

It will be supported by key indicators, among them the diaspora remittances which stands at a cumulative $3,817.4 million as of November 2023, 4.0% higher than the $3,670.6 million recorded over the same period in 2022, which has continued to cushion the shilling against further depreciation.

In the November 2023 diaspora remittances figures, North America remained the largest source of remittances to Kenya accounting for 57.2%.

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Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.

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