The International Monetary Fund (IMF) has expressed unease over the Kenyan shilling’s sustained stability against the US dollar, suggesting that the currency’s performance may not fully reflect prevailing economic realities.
During an IMF staff mission to Kenya in mid-October, officials reportedly questioned why the shilling had remained unusually steady for such an extended period, even amid global currency fluctuations that should have strengthened it further.
According to Kenya Revenue Authority (KRA) chairman Ndiritu Muriithi, IMF representatives were “puzzled” by the currency’s limited movement. “They argued that the exchange rate appeared too stable, which they believed was affecting inflation dynamics,” Muriithi said, describing the remark as “quite surprising.”
The IMF delegation met with President William Ruto, Treasury Cabinet Secretary John Mbadi, and Central Bank of Kenya Governor Kamau Thugge, among other top officials, to review the nation’s economic health and fiscal management.
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For nearly a year, the shilling has traded around KSh 129 to the dollar, fluctuating only slightly between KSh 129.22 and KSh 129.9 since January. However, it has weakened against other major currencies, including the euro (down 12%) and the British pound (down 6.6%).
Despite this, the shilling’s steadiness against the dollar persists, even as the greenback itself has softened globally.
FX Pesa’s lead market analyst, Rufas Kamau said a strong shilling benefits Kenya’s import-heavy economy, saving the country billions in foreign exchange.
“Because Kenya imports far more than it exports, a firm shilling actually works in our favour,” Kamau explained. “It lowers the cost of imports, helping the country save more money than it loses from reduced export competitiveness.”
