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Kenyan Shilling Continues To Shine Against The US Dollar, Ends The Week At Ksh 130

BY Soko Directory Team · June 10, 2024 12:06 pm

KEY POINTS

On a year-to-date basis, the shilling has appreciated by 17.2% against the dollar, in contrast to the 26.8% depreciation recorded in 2023.

During the week, the Kenya Shilling appreciated against the US Dollar by 0.1%, to close at Kshs 130.0, from Kshs 130.2 recorded the previous week according to stats compiled by Cytonn Investments.

On a year-to-date basis, the shilling has appreciated by 17.2% against the dollar, in contrast to the 26.8% depreciation recorded in 2023.

Support for the Kenyan Shilling will come from:

  1. Diaspora remittances stood at a cumulative USD 4,457.5 mn in the 12 months to April 2024, 11.9% higher than the USD 3,984.9 mn recorded over the same period in 2023, which has continued to cushion the shilling against further depreciation. In the April 2024 diaspora remittances figures, North America remained the largest source of remittances to Kenya accounting for 54.0% in the period.

  2. The tourism inflow receipts came in at USD 352.5 bn in 2023, a 31.5% increase from USD 268.1 bn inflow receipts recorded in 2022, and owing to tourist arrivals that improved by 27.6% to 182,000 in the 12 months to January 2024, from 151,000 recorded during a similar period in 2023.

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The shilling is however expected to remain under pressure in 2024 as a result of the following:  

  1. An ever-present current account deficit which came at 4.0% of GDP in FY’2023 from 5.1% recorded in FY’2022.

  2. The need for government debt servicing, continues to put pressure on forex reserves given that 67.3% of Kenya’s external debt was US Dollar denominated as of December 2023.

  3. Dwindling forex reserves, currently at USD 7.0 mn (equivalent to 3.6 months of import cover), which is below the statutory requirement of maintaining at least 4.0 months of import cover.

Key to note, Kenya’s forex reserves decreased by 0.1% during the week to remain relatively unchanged from the USD 7.0 bn recorded the previous week, equivalent to 3.6 months of import cover, same as was recorded the previous week, and remained below the statutory requirement of maintaining at least 4.0-months of import cover.

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Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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