Kenyan Shilling Holds Firm Against the Dollar as Strong Forex Reserves Steady the Local Market

The Kenyan shilling remained stable in early January. It held firm against the US dollar and regional currencies. This performance signaled calm in the foreign exchange market. The Central Bank of Kenya linked the stability to strong foreign exchange reserves.

In its weekly bulletin released on January 8, the CBK reported a slight gain against the dollar. The shilling traded at KSh 128.99 per unit. This was marginally stronger than KSh 129.01 recorded on December 31, 2025. The movement was small. However, it showed steady demand and controlled volatility.

CBK Governor Kamau Thugge said the currency remained stable during the review period. He noted that both international and regional markets showed little pressure. As a result, the shilling avoided sharp swings seen in previous months.

Across the East African region, the currency also held steady. Against the Tanzanian shilling, it traded at 19.08. This was a slight improvement from 19.09 in the previous week. The Kenyan shilling also exchanged at an average of 28.04 against the Ugandan shilling.

At the same time, movements against other regional currencies remained minimal. The shilling traded at 11.30 against the Rwandan franc. It exchanged at 22.94 against the Burundian franc. These rates were almost unchanged from those recorded at the start of January. This trend reflected regional stability.

Strong foreign exchange reserves continued to support the currency. As of January 8, reserves stood at USD 12.38 billion. This is equivalent to about KSh 1.597 trillion. The reserves provide cover for 5.3 months of imports. This is well above the statutory minimum of four months.

Although the reserves declined slightly from USD 12.39 billion at the end of December, the CBK said they remain adequate. The buffer helps protect the economy from external shocks. It also supports confidence in the currency.

Meanwhile, Kenya’s economic outlook remains positive. Data from the Kenya National Bureau of Statistics showed stronger growth. The economy expanded by 4.9% in the third quarter of 2025. This was higher than the 4.2% growth recorded in the same period in 2024.

The construction sector led the recovery. It grew by 6.7% after contracting the previous year. Agriculture, forestry and fisheries also expanded. They recorded growth of 3.2%. These gains raised hopes for more jobs and better incomes.