The Kenya shilling weakened slightly against the US dollar on Monday, September 28, as the dollar extended its gains against the local currency.
Latest exchange rate data showed the shilling trading at KSh129.67 against the dollar, up from KSh129.62 recorded on Friday, September 25.
The latest movement adds to a gradual rise by the US currency in recent weeks, although the local unit continues to trade within a relatively narrow range.
The dollar’s latest gain comes at a time when global conditions continue to favor the US currency, with stronger demand for dollar-denominated assets and growing concerns about inflation in major economies.
Strong Reserves Cushion Kenya Shilling
Despite Monday’s decline, the shilling has remained largely stable against major international and regional currencies.
During the week ending September 24, the local currency traded at Ksh129.48 per dollar compared to Ksh129.62 a week earlier, highlighting the relative stability that has characterized Kenya’s foreign exchange market in recent months.
The shilling has continued to draw support from healthy foreign exchange reserves, which stood at USD 15.04 billion as of September 24.
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The reserves were equivalent to 6.1 months of import cover, comfortably above the statutory requirement of at least four months.
Regionally, the Kenya shilling remained relatively stable against East African currencies.
The Ugandan shilling exchanged at 30.14 units to the Kenya shilling, while the Tanzanian shilling traded at 20.46 and the Rwandan franc at 11.37.
Global Dollar Strength Persists
The dollar’s advance against the shilling comes amid renewed strength in global currency markets.
According to the latest weekly monetary developments report, the US Dollar Index strengthened by 1.06 per cent during the week ending September 24, reflecting continued demand for the American currency.
Inflation concerns also remained elevated in key economies.
In South Africa, headline inflation rose to 4.4 per cent in August from 4.3 per cent in July, prompting the South African Reserve Bank to raise its policy rate by 25 basis points to 3.75 per cent.
Meanwhile, Murban crude oil prices climbed to USD 97.36 per barrel on September 24 from USD 94.70 a week earlier due to supply concerns linked to the conflict in the Middle East.
Rising oil prices remain significant for Kenya because the country relies heavily on imported petroleum products.
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Higher crude prices typically increase demand for dollars from importers, adding pressure on the local currency.
Global Dollar Strength Persists
The dollar’s advance against the shilling comes as global economic conditions continue to favor the US currency.
Earlier this month, the US Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75 per cent to 4.0 per cent, marking its first rate increase since 2023.
The dollar has also benefited from the relative strength of the US economy at a time when several major economies continue to grapple with inflation and slower growth.
The World Economic Outlook Update, July 2026: Global Economy in Crosscurrents of War and Technology maintained a solid outlook for the United States, citing strong domestic demand and continued investment.
At the same time, investors have increasingly turned to the dollar as a safe-haven asset amid heightened geopolitical tensions and persistent inflation concerns.
This has helped push the US Dollar Index higher.
Against other major currencies, the dollar also recorded notable gains during the week.
The euro fell to a two-month low of $1.1370 on Thursday, September 24, before recovering to about $1.1410 on Friday.
The Japanese yen also weakened against the dollar during most of the week, with the dollar reaching above ¥159 on Thursday before falling to about ¥157.13 on Friday as Japan stepped up warnings over excessive yen weakness.
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