The Kenyan shilling reached a three-and-a-half-year high against the U.S. dollar on Thursday, with the local currency trading at an average of Sh99.70 per dollar—its strongest level since July 2015. This appreciation followed increased foreign currency inflows and reduced demand for imports, according to market analysts.
The currency has gained 2.50 shillings against the dollar since the start of 2019, easing pressure on import-dependent sectors. Goods such as vehicles, machinery, and fuel are now cheaper to import, benefiting consumers and businesses reliant on foreign goods.
However, exporters of agricultural products like flowers, tea, and coffee face reduced revenue as their dollar earnings convert to fewer shillings. A commercial bank dealer noted that investor inflows into infrastructure bonds and seasonal export proceeds have contributed to the shilling’s strength, while importers remain cautious about future exchange rate movements.
Fuel prices have declined in recent weeks, partly due to the stronger shilling and falling global crude oil prices. The currency’s gains also lower input costs for manufacturers dependent on imported raw materials, though the long-term sustainability of the trend remains uncertain.
