The Kenyan shilling recorded a notable rebound in 2025, appreciating by 4.1 per cent against the US dollar, supported by improved foreign exchange conditions and steady macroeconomic performance, according to the latest government data.
Figures released in the Kenya National Bureau of Statistics (KNBS) Economic Survey Report 2025 show that the local currency strengthened from an average of KSh134.82 per dollar in 2024 to KSh129.30 in 2025, marking one of its strongest yearly recoveries in recent periods.
The report attributes the gain to improved foreign exchange inflows and broader economic stability, which helped ease pressure on the local currency throughout the year.
“The Kenyan Shilling sustained its recovery momentum in 2025, as reflected in the Trade Weighted Index, which improved from 130.0 in 2024 to 127.6 in 2025, indicating a strengthening of the currency in real effective terms,” KNBS stated.
It further noted that the currency appreciated by 4.1 per cent against the US dollar during the review period, reflecting improved market confidence and stabilising external conditions..
The Central Bank of Kenya (CBK) has in recent months maintained that its foreign exchange reserves have played a key role in cushioning the shilling against global shocks, particularly amid ongoing geopolitical tensions and fluctuating global demand.
CBK Governor Kamau Thugge has previously acknowledged that external pressures, including global conflicts, continue to influence currency volatility, though he noted that the country remains better positioned to manage such risks due to strengthened reserves.
Beyond the US dollar, the shilling also posted gains against several major currencies. It appreciated by 1.1 per cent against the British Pound, easing from KSh172.27 in 2024 to KSh170.40 in 2025, a shift that is expected to slightly reduce import costs from the United Kingdom.
Against the Japanese Yen, the local currency strengthened by 3.1 per cent, while it recorded its strongest performance against the Indian Rupee, gaining 8.0 per cent over the same period. This trend is likely to benefit Kenyan importers sourcing goods from Asian markets.
However, performance within the East African region was mixed. The Kenyan shilling weakened against Rwanda’s franc, which appreciated by 12.6 per cent, while Uganda’s shilling also edged ahead slightly. In contrast, Tanzania’s shilling lost ground against the Kenyan currency.
Overall, KNBS noted that Kenya’s economy grew by 4.6 per cent in 2025, slightly lower than the previous year’s 4.7 per cent, reflecting moderated but stable economic expansion.
While the growth rate fell short of government targets, analysts say the strengthening currency signals improved investor sentiment and better foreign exchange stability, both of which are key to supporting trade and import-dependent sectors.
The outlook for the shilling, however, remains tied to global economic conditions, with authorities maintaining a cautious stance amid ongoing geopolitical uncertainties and shifting international markets.
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