The Kenyan shilling was the best-performing currency in the sub-continent as of the end of June 2024, recording an appreciation of 30 per cent, says a new markets analysis.
Kenya Institute for Public Policy Research and Analysis (KIPPRA) for quarterly market, the shilling strengthened against the dollar in April-June 2024, appreciating by 4.7 per cent, having hit the highest of Sh136 against the green buck on May 6.
That was contrary to last year during the same period as shilling depreciated against the dollar by 19.44 per cent between June 2022 and June 2023.
“The Kenya shilling also strengthened against the sterling pound and the Euro, appreciating by 3.8 per cent and 5.6 per cent, respectively during the same period,” the report indicated.
Averagely, the Kenya shilling exchanged at an average of Sh130.8, Sh165.2 and Sh141.0 against the dollar, Sterling pound and the Euro, respectively, in the period under review compared to an average exchange rate of Sh137.3.5, Sh171.8 and Sh149.4, respectively, in April-June 2023.
The appreciation has been partly attributed to issuance of a $1.5 billion (Sh193.6 billion) seven-year-note in the Eurobond market earlier this year, the success of which triggered a strong rally in the shilling’s value.
The US dollar index remained above the 100-mark throughout the quarter to close at 105.6 compared to 102.7 in a similar period in 2023, as it neared the threshold index value of 106
This performance is linked to high interest rates in the US Federal Reserve, a move that is likely to weaken emerging markets by increasing the cost of production. The currency has in the past six months strengthened its value against the Tanzanian shilling, Rwandese franc and Uganda shilling by 29.9 per cent, 27.7 per cent and 19.5 per cent respectively.
The appreciation of the shilling brings forth many benefits to investors in the country, playing a significant role in attracting foreign investments and reducing import prices.
Yesterday, the Kenya shilling closed at 129.10 against the dollar, an increase of 0.08 per cent from the previous day.
