CBK: Shilling steady against major currencies
By Faith Lagat, August 22, 2025The Kenya Shilling has maintained stability against major international and regional currencies, the Central Bank of Kenya (CBK) has said in its Weekly Bulletin for the period ending August 21, 2025.
The local unit exchanged at Ksh129.24 per US dollar on August 21, 2025, unchanged from a week earlier, despite global economic turbulence.
The CBK noted that the currency also held firm against the Sterling Pound, Euro, Japanese Yen, and regional currencies, including the Ugandan and Tanzanian shillings, Rwandese franc, and Burundi franc.
Reserves remain adequate
The CBK attributed the resilience partly to healthy foreign exchange reserves, which stood at USD 11.037 billion as of August 21, 2025. This is equivalent to 4.8 months of import cover, above the statutory requirement of four months.
“The usable foreign exchange reserves remained adequate at USD 11,037 million (4.8 months of import cover) as of August 21,” the CBK noted, underlining that the reserves provide a critical buffer against external shocks.
This performance comes against a backdrop of global market volatility, with inflationary pressures in the United Kingdom and a strengthening US Dollar Index weighing on emerging market currencies. Kenya’s stable import cover signals prudent management of the economy, CBK said.
Liquidity in money markets
The bulletin further highlighted a balanced liquidity environment in the money market. Commercial banks’ excess reserves averaged Ksh30.4 billion against the 3.25 per cent cash reserve requirement.
The interbank rate dipped slightly to 9.47 per cent from 9.48 per cent the previous week. However, both the number of interbank deals and the value traded fell, indicating a cautious approach by commercial banks.
Analysts say the relative stability in the interbank market points to effective CBK interventions, including recent open market operations, that have ensured liquidity without overheating the system.
Outlook
The steadiness of the shilling offers optimism for the economy, particularly in shielding consumers from sudden spikes in the cost of imports. It also strengthens investor confidence at a time when other global currencies are facing pressure.
However, CBK cautioned that external risks remain, with global monetary tightening and commodity price shifts likely to influence exchange rate movements.
For now, the currency’s resilience is seen as a reflection of sound policy management, even as the country navigates economic headwinds.