The Kenyan shilling is expected to maintain its recent stability after currency traders reported softer demand for the U.S. dollar, reducing pressure on the local unit despite persistent global economic uncertainties.
A survey of foreign exchange traders indicated that the shilling is likely to remain largely unchanged next week, buoyed by subdued demand for dollars and sustained inflows from investors purchasing Kenyan government securities.
On Friday, August 7, commercial banks quoted the shilling at Ksh129.39/45 against the U.S. dollar, compared to Ksh129.20/40 recorded a week earlier, signalling minimal movement in the exchange rate.
"We are not seeing much strong demand (for dollars). The view is that it is going to be stable," one trader told Reuters, citing muted appetite for the greenback in the domestic market.
The outlook comes as Kenya continues to attract foreign investors into its government bond market, with traders noting that the inflows have helped shield the shilling from external market volatility.
While several African currencies are forecast to post mixed performances in the coming week, traders expect the Kenyan shilling to remain steady, alongside the currencies of Nigeria and Ghana.
The survey was released just days before the Central Bank of Kenya's (CBK) Monetary Policy Committee convenes on August 11 to review the benchmark lending rate.
Ahead of the meeting, the Kenya Bankers Association urged the CBK to keep the Central Bank Rate unchanged at 8.75 per cent, arguing that the current monetary policy has helped preserve exchange rate stability while keeping inflation within the target range.
The association said inflation has remained broadly under control despite edging up to 6.5 per cent in July, attributing the increase mainly to rising food and transport prices.
It also noted that Kenya's economy expanded by 5.3 per cent during the first quarter of 2026, driven by improved performance in manufacturing, construction, tourism and other service industries.
Last week, the Central Bank also reported that the shilling had remained stable against major global and regional currencies.
The regulator attributed the stability largely to adequate foreign exchange reserves, further strengthening market expectations that the local currency will continue to hold firm in the short term.
