Traders Cite Remittances & Agricultural Exports as Factors Behind Shilling’s Consistency

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After three months of erratic depreciation and appreciation of the Kenyan currency that caught global attention, the Shilling has found consistency for two weeks. 

According to data from the Central Bank of Kenya, for close to 14 days, the Shilling has traded at 133 against the United States Dollar (USD). 

On Tuesday, May 7, CBK revealed that the Shilling’s exchange rate against the Dollar was 133.0434. 

The figure was tabulated from the commercial bank’s average exchange rates at market close on Monday. 

Former CBK Governor Patrick Njoroge holding bank notes (left) and someone counting 100 US dollar bills.

Photo

CBK / Trade Africa

Commercial banks quoted the shilling at 133/134 on the morning of Tuesday further signifying  the local currency’s consistency. 

Traders remarking on the Shilling’s stability attributed that to the inflows of hard currency from Kenyans working abroad. 

Diaspora remittances have in recent times become one of Kenya’s top foreign exchange earners bringing approximately Ksh671 billion annually. 

Additionally, the Shilling has continued to exhibit stability against the Dollar due to money raised through agricultural exports. 

“We’re not seeing a lot in terms of the demand side, they’re waiting for the (dollar exchange rate) to go lower,” a trader was quoted by Reuters commenting on the Shilling stability. 

Diaspora remittances have been a key focus point for President William Ruto’s administration having been pinpointed as a long-term plan to stabilise the Shilling. 

On April 27, President Ruto remarked that he was laying the groundwork to ensure diaspora remittances more than doubled in less than a decade.

“It is my intention that in the next five to seven years we should increase our diaspora remittances from USD4 billion to USD10 billion dollars,” he remarked.

“It will go a long way in ensuring that more Kenyans have the income that supports our economy.”

President William Ruto addressing a delegation.

PCS



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