Two reasons why the Kenyan Shilling is Gaining Against the US Dollar

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For the better part of this week,the Kenyan shilling has been gaining against the US dollar.On Wednesday 14/2/2024 the US dollar was valued at Ksh 150.55,up from Ksh 160.55 Wednesday the previous week.Kenyans are curious to know as to why the US dollar is losing against the Kenyan Shilling.

One of the reasons is that China is celebrating New Year holiday which started on 9 February 2024 to 15 February 2024.Nearly all industries are not exporting products to other countries. Most of the products in Kenya are shipped from China, implying that when the market is normal, demand for the dollar is high. Since importation of goods at the moment is low, the demand for US dollars is low.

Another reason is the Euro Bond Loan which the Kenyan government obtained this month. The amount was US$1.5 billion which will mature in 2031.Those notes formed part of Kenya’s foreign currency reserves.

Those two factors impacted positively on the Kenyan currency which is now gaining rapidly.

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