The Kenya Shilling has demonstrated resilience once again against the U.S. dollar and is retailing at 2.2% higher in the final week of May.
The shilling’s performance has captured the attention of investors and analysts alike – coming a week after President William Ruto concluded his official visit to the States.
Data from the Central Bank of Kenya (CBK) indicates that the shilling traded at 130 units on Friday, less than a week from its opening rate of 133 units on May 27, 2024.
Further Gains for Shilling
The gain is seen as a precursor to further gains, especially in light of anticipated dollar inflows promised to President Ruto while in Washington D.C.
CBK Governor Kamau Thugge predicted the gains in the shilling anchored on the expected inflows when the U.S. begins to actualise its promise to President Ruto.
His sentiments have been echoed by market analyst Rufas Kamau from FXPesa, who spoke to one of the local media houses.
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“After the president visits the U.S.A, expect more USD inflows and this could strengthen the Kenya shilling further towards 120,” said Kamau.
According to Kamau, the shilling is likely to strengthen further to 120 units as more foreign investments flow into the country.
President Ruto’s successful negotiations in the US secured close to Ksh.600 billion in investments, including key projects like the Nairobi-Mombasa expressway (Ksh.469 billion) and the Coca-Cola beverage plant (Ksh.23 billion).
World Bank Attribution
The World Bank predicted the shilling could gain further against the U.S. Dollar.
World Bank’s attribution of the shilling’s value rise to the recent hike in the base lending rate by the CBK adds another layer of significance to the currency’s performance.
CBK rate stands at 13%, the highest level since 2012, and signifies an effort to curb inflation and stabilize the shilling in the face of external pressures.
