The Kenyan shilling reached a 3.5-year peak against the dollar on Thursday, with the currency averaging Sh99.70 per dollar—its strongest level since July 2015. This shift has positioned the economy for reduced import costs on goods including vehicles, fuel, and machinery.
The currency’s appreciation followed increased foreign exchange inflows and diminished import demand, with the shilling gaining Sh2.50 against the dollar since January 2019. Analysts noted the trend reflects sustained investor confidence, including inflows from infrastructure bond purchases.
While cheaper imports benefit consumers and businesses reliant on foreign goods, exporters of agricultural products face declining revenues. A commercial bank dealer attributed the shift to cautious buyer behavior, with market participants awaiting further rate declines.
The stronger shilling has already reduced fuel prices in recent cycles, complementing global crude price declines. Vehicle importers and manufacturers using imported raw materials also stand to gain from lower input costs, according to the report.
