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Kenya shilling hit a five-month high against the US dollar and other international currencies since January 2025.

Data from the Central Bank of Kenya (CBK) indicated that the shilling closed the month of May 2025 on a high note.

The local currency traded at KSh 129.26 per US dollar in the week ending Thursday, May 29.

CBK governor Kamau Thugge attributed the strong growth in the value of the shilling to increased foreign currency reserves.

Thugge noted that the reserves remained adequate, growing from KSh 1.2 trillion to KSh 1.4 trillion worth of the greenback.

"The usable foreign exchange reserves remained adequate at USD 10,467 million (KSh 1.4 trillion) as of May 29 from USD 9,749 million (KSh 1.2 trillion) reported on April 30," said Thugge, a weekly bulletin.

Thugge said the reserves will support 4.7 months of import cover, meeting the regulator's statutory requirement of maintaining at least 4 months of import cover.

In an exclusive interview with Geopolitical economist Aly Khan Satchu explained that the shilling is poised to strengthen further with the support from the Gulf Cooperation Council (GCC)

Satchu noted that the shilling could exchange at KSh 120 per US dollar in the coming months.

"I suspect the Gulf Cooperation Council (GCC) support has been a big assist to Kenya shilling. However, we all know the shilling exhibits asymmetric behaviour. It could reach 120," said Satchu.

However, he warned that the shilling faces the risk of decline since it is vulnerable to global market shocks.

Kenya shilling maintained its position as the best-performing currency in Africa and across the world.

According to the African Development Bank (AfDB) Economic Outlook 2025, Kenya shilling is projected to appreciate by 3% or more as of December 2025.

The lender noted that other currencies on the continent are set for depreciation, apart from Kenya shilling and the Moroccan dirham.

Currencies of countries including Egypt, Ethiopia, Ghana, Libya, Nigeria, Rwanda, Zambia, and Zimbabwe are projected to depreciate by at least 6%, during the same period under review.

Source: TUKO.co.ke