The Kenyan Shilling has gained strength against the Dollar
On Tuesday, November 26, the Kenyan shilling appreciated against the US dollar, as the remittances in dollars equaled the increasing demand from the importers.
The shilling was trading at 129. 00/130. 00 by 11:03 am, according to Reuters data from LSEG, compared to the Central Bank of Kenya’s (CBK) closing rates of 129. 57 from November 22. The shilling gained 0. 57 cents against the dollar despite the dollar having strengthened on President-elect Donald Trump’s victory in the US elections earlier this month.
Nevertheless, according to the CBK data, the shilling ended Monday, November 25, at a trading rate of 129. 57.
The remittances have been steady since peaking at an all-time high in October. The CBK reported that remittances for the said month reached $437. 2 million, about Ksh56. 3 billion at current exchange rates, an increase of $18. 7 million, about Ksh2. 4 billion at current exchange rates, from September.
The CBK said in the latest weekly bulletin published last Friday, November 15, that has seen cumulative inflows increase by 15. 3% in the 12 months to October 2024 surge to Ksh623 billion ($ 4. 8 billion) from Ksh532 billion ($4. 1 billion) in the similar period a year ago.
CBK indicated that the United States accounted for the largest source of diaspora remittances into Kenya, contributing 53% of the total number. In October 2024, the country received 7 percent of the funds.
The announcement by the regulator indicated that remittance inflows have contributed to the country’s current account and the foreign exchange market’s stability in the recent period.
A current account depicts the trade of goods and services, payments to foreign investors, and transfers such as foreign aid.
Shilling firm after dollar surge driven by President-elect Donald Trump’s pledge to slap tariffs on imports coming from Mexico, Canada, China, and Europe.
Trump has promised to introduce a 25 per cent tariff on imports from Mexico and Canada, and slap an additional ten per cent over and above all the existing tariffs on Chinese goods entering the US.
The recent movement of the shilling took place just a fortnight after it weakened against the US dollar, driven by strong demand for the greenback in all sectors.
The dollar has gained strength against all currencies worldwide, including the shilling. Forex experts said there are increased investors buying dollars as the currency has become attractive and are repatriating to the US markets.
Nevertheless, the local currency still held its own as the best performer globally for the tenth consecutive month of this year. This is after the government opted to retire the Ksh310 billion Eurobond that matured in June this year.
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