![Kenya Shilling Up 2.1% Against Dollar to Open Week At 134](https://metropoltv.co.ke/wp-content/uploads/2024/03/45DNkaz22ZSkT4nd9e1jFXME8QZTIGzVLZW3FuG1-780x470.jpg)
The Shilling continued its winning streak against the US Dollar at the start of the week Monday, signalling positive gains after the rough year 2023.
CBK figures show the shilling is currently retailing at 134.4 units.
It has gained by 2.1% over the weekend. The shilling closed the week at 137 units.
During the week, the Kenya Shilling gained against the US Dollar by 3.5%, to close at Ksh.137, from Ksh.142.8 recorded the previous week.
On a year-to-date basis, the shilling has appreciated by 13.9% against the dollar.
This is in contrast to the 26.8% depreciation recorded in 2023.
Reduced Transport Cost on Shilling Gains
A cool on the shilling has seen a significant drop in transport costs.
It is anchored on lowered petrol, diesel and kerosene prices in last week’s price review by the EPRA.
Also Read:Â Kenya Shilling Hits 137 Units Aginst Dollar, Level Last Seen in June
The maximum allowed price for Super Petrol, Diesel and Kerosene decreased by Ksh.7.2, Ksh.5.1, and Ksh.4.5 each respectively.
They are retailing at Ksh.199.2, Ksh.190.4, and Ksh.188.7 per litre respectively.
In February the fuel cost Ksh.206.4, Ksh.195.5 and Ksh.193.2 respectively.
Bus fare from Kitengela to Nairobi CBD has been reduced by 16.6% to Ksh.100 due to reduced fuel costs.
It cost Ksh.120 on a similar route before the review.
During the week, the equities market was on an upward trajectory, with NSE 10 gaining the most by 7.9%.
NASI, NSE 25, and NSE 20 gained by 7.3%, 7.0%, and 5.2% respectively.
This has taken YTD performance to gains of 10.7%, 8.5%, 13.2%, and 14.3% for NASI, NSE 20, NSE 25, and NSE 10 respectively.
The equities market performance was driven by gains recorded by large-cap stocks such as KCB Group.
Other stocks that have gained are SCBK, and Co-operative Bank of 15.9%, 12.6%, and 10.6% respectively.
What Might Affect Shilling
The shilling is however expected to remain under pressure in 2024 as a result of three factors.
An ever-present current account deficit came at 3.5% of GDP in Q3’2023 from 6.4% recorded in a similar period in 2022.
The need for government debt servicing continues to put pressure on forex reserves.
Treasury figures show that 67.5% of Kenya’s external debt was US dollar-denominated as of September 2023.
The pressure will come from the dwindling forex reserves, currently at $7 billion.
The reserves are equivalent to 3.7 months of import cover which is below the statutory requirement of maintaining at least 4.0 months of import cover.
![Why Kenya Shilling is Volatile Against Dollar Despite Gains](https://metropoltv.co.ke/wp-content/uploads/2024/02/images-300x150.jpg)