Expectations are that the Kenya shilling exchange rate against the dollar is expected to remain stable over the next two months to end of September. This is according to the July 2025 Monetary Policy Committee (MPC) Market Perceptions Survey conducted by the Central Bank of Kenya(CBK).
The Central Bank survey sought views from Kenya firms as well as banks on their expectations regarding the direction of change in the exchange rate of the Kenya shilling against the US Dollar in August and September 2025.
The local unit’s stability is to be strengthened by adequate foreign exchange reserves, rising diaspora remittances, growing export earnings and tourism receipts. Kenya’s foreign exchange reserves stood at US$ 11,112 million as at August 14th 2025. Kenya is currently receiving enormous US dollar inflows from tourists streaming in to witness the ongoing wildebeest migration, which hits high peaks during the July-September period.
Monthly CBK Figures on diaspora remittances shows consistent inflows, totalling US$ 410.1 million in July 2025 from 422.8 million in June 2025. The USA was the top source of remittances to Kenya at US$244.7million compared to US$ 80.2million from Europe and US$ 97.9 million from the rest of the world.
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The 12 months’ cumulative inflows to July 2025 increased by 11.1% to US$ 5,080 million compared to US$ 4,572 million in a similar period in 2024. Remittance inflows remain Kenya’s key source of foreign exchange earnings and continues to support the local unit and the country’s balance of payments.
The Kenya shilling exchange rate, which is on a stable path for now, faces headwinds from rising external debt repayments, dividend repatriation as the half-year earnings season ends, and potential shocks from US-China trade wars and geopolitical tensions, especially the Russian-Ukraine conflict.
When the forex markets opened Friday, the CBK was quoting the Kenya shilling exchange rate against the US dollar at 129.2391. The shilling remained stable against major international and regional currencies during the week ending August 14, 2025. It exchanged at KSh 129.24 per U.S. dollar on August 14th 2025.
A stable Kenya shilling is anticipated to limit imported inflation especially in food, fuel, and manufactured goods that rely on imported inputs.
According to CFA Dedan Kimani, an investment banker, key factors supporting the Kenya shilling include, as it were, strong foreign exchange reserves, which stood at US$ 9.3 billion as at April 2025, CBK interventions, diaspora remittances and sound monetary policy signals from CBK.
“The risk is that the current stability of the Kenya Shilling against the US$ is primarily hedged on CBK interventions and not any economic stimulus and or factors. Kenya’s high debt levels, growing at a 10 year CARG of 16% to KSh 10.8 billion in September 2024, will continue to exert pressure on forex reserves and the shilling,” said Maina.
He said the local unit exchange against the dollar will also continue to be under pressure, though, due to Kenya’s current account deficit, driven by high imports of petroleum products and manufacturing equipment. This is expected to increase demand for US dollars and put pressure on the Kenya shilling.
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