Kenyan Shilling Weakens Globally but Strengthens Regionally
Shilling Weakens Against Global Currencies
The Kenyan Shilling weakened against major global currencies in Q3 2025. Moreover, it lost value against the Euro, Pound, Yen, and Rand.
Marginal Gain Against US Dollar
The shilling posted a slight gain of 0.2 percent against the U.S. Dollar. Nevertheless, depreciation against other global currencies remained significant.
Stronger Against Regional Currencies
The shilling appreciated by 5.8 percent against the Tanzanian Shilling. Additionally, it gained 4.1 percent against the Ugandan Shilling during the same period.
Inflation Slightly Higher
Inflation rose to 4.42 percent in Q3 2025 from 4.08 percent in Q3 2024. Consequently, rising food and beverage prices drove the increase.
Monetary Policy Adjustments
The Central Bank lowered the CBR from 9.75 percent to 9.50 percent in August and September 2025. Furthermore, the move aimed to stimulate private sector lending.
Foreign Exchange Reserves Strengthen
Net foreign assets rose by 2.7 percent to Ksh948.2 billion. Additionally, increased holdings at the Central Bank boosted reserves.
Impact on Imports
Depreciation against global currencies may raise costs of imported goods. Consequently, fuel, machinery, and electronics could become more expensive for consumers.
Current Account Deficit Widens
The deficit grew from Ksh43.5 billion in Q3 2024 to Ksh135.3 billion in Q3 2025. Ultimately, this widening may exert pressure on the shilling.
Nairobi Securities Exchange Gains
The NSE 20 Share Index rose from 1,776 points in September 2024 to 2,973 points in September 2025. Moreover, investor activity increased despite currency volatility.
Sectoral Growth Supports GDP
Agriculture, construction, manufacturing, transport, and financial services expanded steadily. Consequently, GDP grew 4.9 percent in Q3 2025, up from 4.2 percent in Q3 2024.
End-Year Stability
The shilling traded at Ksh129.01 per U.S. Dollar on December 31, 2025. Additionally, strong reserves worth Ksh1.6 trillion supported stability during the final week.
