The Kenyan shilling has held firm below Ksh130 to the US dollar despite a dip in money sent home by Kenyans living abroad, according to Central Bank of Kenya (CBK) data released on Friday, October 16.
Diaspora remittances fell to US$438.5 million (about Ksh56.9 billion) in September, from US$451.8 million in August, a drop of roughly US$13.3 million. The figure remains close to this year’s high of US$450.3 million recorded in March.
Reserves cushion the currency
The shilling traded at around Ksh129.81 to the dollar. Usable foreign exchange reserves stood at US$14.69 billion (about Ksh1.91 trillion) as of October 15, equivalent to 5.9 months of import cover, comfortably above the statutory minimum of four months.
Remittances are one of Kenya’s largest sources of foreign currency, alongside tea, horticulture and tourism, and help the CBK manage pressure on the shilling.
Pressure ahead
Some analysts have warned that the shilling could come under pressure in the short term as higher oil prices push up the import bill, which could in turn raise the cost of machinery, electronics and raw materials. For now, the currency’s long stretch of stability around the Ksh129 mark continues.
