Kenya’s currency strengthened slightly against the US dollar on Monday, maintaining the stability that has characterised the foreign exchange market in recent weeks.
Central Bank of Kenya (CBK) data showed the shilling exchanged at KSh129.43 to the dollar on September 7, improving marginally from last week’s average of KSh129.46 and Friday’s rate of KSh129.47.
The latest movement signals continued resilience of the local unit despite persistent global economic uncertainties and fluctuations in major international currencies.
The shilling also posted gains against the British pound, which traded at KSh174.89, down from last week’s average of KSh175.32.
However, the local currency weakened slightly against the euro, with the exchange rate moving to KSh150.34 from an average of KSh150.30 in the week ending September 3.
The Japanese yen recorded the biggest shift among major currencies tracked by the CBK, with the rate rising to KSh82.91 per 100 yen on Monday, up from an average of KSh81.13 last week.
The Kenya shilling exchanged at 29.19 units against the Ugandan shilling on Monday, compared to a weekly average of 29.14.
The Tanzanian shilling also stood at 20.47 from a previous average of 20.43, while the Rwandan franc remained unchanged at 11.36.
Stable Shilling Cushions Economy
The latest exchange rate movements come days after the CBK reported that the Kenya shilling had remained stable against major international and regional currencies during the week ending September 3.
According to the regulator, the shilling exchanged at KSh129.48 per US dollar on September 3 compared to KSh129.47 on August 27, reflecting limited volatility in the market.
The stability has been supported by healthy foreign exchange reserves, which stood at USD 14.88 billion, equivalent to 6.1 months of import cover as of September 3.
The reserve level remains above the CBK’s statutory requirement to maintain at least four months of import cover.
A firm shilling generally benefits importers by lowering the cost of bringing in fuel, machinery, pharmaceuticals, and other goods priced in foreign currencies.
It also helps contain imported inflation by reducing pressure on consumer prices.
Inflation Pressure Persists
Even as the shilling remains stable, Kenya continues to grapple with inflationary pressures.
CBK’s latest weekly bulletin showed headline inflation increased marginally to 6.6 percent in August 2026 from 6.5 percent in July, largely driven by higher core inflation.
Core inflation rose to 3.4 percent from 3.2 percent, reflecting increased prices of key consumer items including beef with bones and fresh packeted cow milk.
Non-core inflation, however, eased to 14.7 percent from 15 percent during the same period.
Globally, inflation concerns remain elevated, particularly in advanced economies.
The euro area recorded inflation of 3.3 percent in August, up from 2.9 percent in July, while energy prices continued to exert upward pressure on consumer costs.
The CBK noted that the US Dollar Index weakened by 0.25 percent during the week, while Murban crude oil prices climbed to USD 86.01 per barrel from USD 81.78, amid renewed concerns over global oil supplies.
In early September, renewed US-Iran tensions further pushed up global oil prices.
On September 5, US forces struck three Iranian oil tankers, while shipping through the Strait of Hormuz declined sharply.
By September 6, only about 10 commodity vessels were passing through the strategic waterway daily, the lowest level since May.
Brent crude subsequently rose to about $97.47 per barrel on September 7, approaching the $100 mark.
The disruption has heightened concerns over global oil supplies and could increase fuel import costs for countries such as Kenya if the conflict persists.
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