The Kenyan shilling is expected to remain stable against the U.S. dollar, supported by a $619 million balance-of-payments surplus and robust foreign exchange reserves, according to the Central Bank of Kenya (CBK).
CBK Governor Kamau Thugge, during a Monetary Policy Committee briefing, said the institution has already factored in potential external shocks in its projections for the balance of payments.
He noted that the bank has taken a cautious approach, including assumptions of much lower export growth, slower remittance inflows, and reduced growth in tourism receipts.
“We have indeed factored in, and I think we’ve been very cautious in our projections of the balance of payments. We have taken into account much lower export growth and have assumed a deceleration in remittances and lower growth in tourism receipts, yet we still have a balance of payments surplus of $619 million,” he said.
The Governor added that strong buffers and foreign exchange reserves will help the country withstand shocks and stabilize the exchange rate.
He revealed that foreign exchange reserves are about $13.4 billion, or 5.7 months of import cover.
CBK Says Kenya Shilling Will Remain Stable
Thugge explained that these reserves were intentionally strengthened in anticipation of such disruptions, adding that the cushioning would help stabilize the economy.
He emphasized that the surplus and strong reserves are key tools for the CBK to manage volatility in the Kenya shilling–US dollar exchange rate going forward.
“We were waiting for this kind of shock. That is why we built up our reserves to the level where they are now,” he said
The CBK acknowledged existing risks, particularly from the Middle East conflict, which could widen the current account deficit.
The bank noted that despite the widening deficit, it is expected to be more than fully financed by inflows in the financial and capital accounts.
It projected a current account deficit of about 4.4 billion US dollars in 2026, alongside inflows of approximately 5 billion dollars, resulting in an overall balance of payments surplus of about 619 million dollars.
CBK said the current account deficit is expected to widen from 2.4 percent of GDP in 2025 to about 3 percent in 2026, driven by a larger trade deficit and lower secondary income transfers.
Also Read: Hopes for Cheaper Bank Loans Shattered as CBK Maintains Base Rate
Kenyan Shilling Hits 130 Mark
This shift follows the weakening of the Kenyan shilling to Ksh130 against the US dollar in early April 2025, marking the end of a 20‑month period of relative stability around the Ksh129 mark.
The Central Bank of Kenya (CBK) quoted the currency at 130 to the dollar on Tuesday, April 7, 2025.
However, on Friday, April 10, 2025, it was trading at 129.15 against the dollar.
Since January 2025, the shilling has traded in a narrow range between Ksh129.22 and Ksh129.24, despite weakening against other major world currencies.
CBK Governor Kamau Thugge earlier attributed the stability to diversified foreign exchange inflows from Diaspora remittances, offshore banks, coffee, and other export items.
Also Read: Kenyan Shilling Hits 130 Mark as 20‑Month Rally Against Dollar Ends
Exports and Remittances
Goods exports grew 8.1% over 12 months to February, projected to slow to 5.3% for the year. Imports are projected to slow to 5.7%.
Services exports are projected to grow by 2.6 percent, while tourism receipts are expected to slow to 3 percent due to disruptions and higher travel costs.
Remittances are forecast to slow to 1.4 percent, partly due to reduced inflows from the Gulf region and weaker global growth. Overall, the CBK remains confident that Kenya’s external position will stay stable.
