Kenyan Shilling Strengthens: Market Insights on Currency Trends

Kenyan Shilling Expected to Strengthen

The Kenya Shilling is predicted to strengthen against the United States Dollar due to various factors such as remittances and offshore dollar inflows for government bond purchases . Currently , the Shilling was quoted at 128.50/129.50 per dollar , showing a slight improvement from the previous week . Traders in Kenya anticipate further strengthening of the Shilling following the government 's announcement to raise at least 50 billion Shillings from tax - exempt securities . This move is expected to attract foreign investors due to the high coupon rates offered on government bonds.

Stability Expected in Other African Currencies

In Ghana , the Cedi is projected to remain stable , trading at 15.54 per dollar with balanced demand and supply in the interbank market . Similarly , in Nigeria , the Naira is expected to hold steady against the dollar following interventions by the Central Bank to ease market pressure . The Naira 's value has strengthened recently , currently quoted at 1,580 to the dollar on the official market . Zambian Kwacha is also likely to remain stable with minor gains due to improved dollar inflows and reduced demand for hard currency . The Ugandan Shilling is expected to maintain its stability as well.

Decline in Foreign Currency - Denominated Loans in Kenya

Businesses in Kenya have reduced their reliance on foreign - currency - denominated loans due to the appreciation of the Shilling and its relative stability in recent months . Data from the Central Bank of Kenya shows a significant drop of 13.3 percent in the value of foreign currency - denominated bank loans in the month to June . This decline is attributed to the Shilling 's appreciation , leading to Kenyans moving away from dollar - denominated debt . Foreign currency - dominated loans currently account for over a quarter of credit extended by commercial banks to the private sector in Kenya.

Impact of Shilling Appreciation on Business Operations

The relative stability and appreciation of the Kenya Shilling have had a positive impact on businesses in the country . The Central Bank of Kenya reports a decline in foreign currency - denominated loans , signaling a shift towards local currency loans . This trend is attributed to the Shilling 's performance against major currencies , influencing businesses to opt for local currency loans . The appreciation of the Shilling has provided businesses with more stability in their operations and reduced the reliance on foreign - currency - denominated debt.