The Kenya shilling strengthened slightly against the US dollar at the start of the week, trading at 129.19 on Monday, July 13, from 129.22 recorded at the close of last week, extending a period of relative stability in the foreign exchange market.
The local currency has remained largely stable in recent weeks, supported by adequate foreign exchange reserves, steady market liquidity, and sustained demand for government securities.
Central Bank of Kenya (CBK) data released on July 13 showed the shilling at 129.19 against the dollar, 173.28 against the sterling pound and 147.61 against the euro.
The Japanese yen traded at 79.85 per 100 units.
More Kenyan Shilling Stability Signals
The latest rate extends a trend seen during the week ended July 9 when the shilling remained stable against major international and regional currencies.
CBK reported that the currency exchanged at 129.22 per dollar on July 9 compared to 129.30 on July 2.
The weekly average stood at 129.24.
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The Kenya shilling’s performance comes amid strong foreign exchange reserves held by the central bank. As of July 9, reserves stood at $14.13 billion (Ksh1.825 trillion), equivalent to six months of import cover.
The reserve level remains above CBK’s statutory requirement of at least four months of import cover, giving the monetary authority room to cushion the market against external shocks.
Liquidity in the banking sector also remained strong during the week under review. Commercial banks held excess reserves averaging KSh30.4 billion above the 3.25 percent cash reserve ratio requirement.
The Kenya Shilling Overnight Interbank Average rate remained unchanged at 8.75 percent throughout the week.
Government securities continued to attract investors, indicating confidence in domestic financial markets.
The Treasury bill auction held on July 9 received bids worth Ksh49.7 billion against an advertised amount of Ksh28 billion, translating to an oversubscription rate of 177.6 percent.
Interest rates on the 91-day and 364-day Treasury bills declined slightly, while the 182-day paper recorded a marginal increase.
Demand was also strong in the bond market.
A reopened 10-, 20-, and 30-year Treasury bond auction attracted bids worth Ksh144.5 billion against an advertised amount of Ksh70 billion, representing a performance of 206.4 percent.
What to Watch This Week
Market participants will be watching global developments that could influence currency movements in the coming days.
CBK’s latest bulletin shows the US Dollar Index strengthened by 0.05 percent during the week ended July 9, reflecting continued demand for the greenback in international markets.
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A stronger dollar typically increases pressure on emerging market currencies, including the shilling.
At the same time, global oil prices moved higher.
Murban crude rose to $72.27 (Ksh9,333) per barrel on July 9 from $67.99 (Ksh8,780) a week earlier, driven by renewed tensions in the Middle East.
Higher oil prices often raise demand for dollars in Kenya since fuel imports are settled in the US currency.
The Kenya shilling also begins the week against the backdrop of improving economic activity.
CBK reported that Kenya’s economy expanded by 5.3 percent in the first quarter of 2026, up from 4.9 percent in the corresponding quarter of 2025, supported by stronger growth in industry and services.
For now, the local currency remains firmly below the 130-shilling mark against the dollar.
Traders will be monitoring importer demand for foreign currency, movements in global oil prices, Treasury market activity and international dollar trends for fresh signals on the shilling’s direction during the week.
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