The National Treasury has assured Kenyans that the shilling remains stable, contrary to recent media reports suggesting concern from the International Monetary Fund (IMF).
As of today, the Kenyan shilling is trading at around Sh129 to the US dollar. In a statement, Treasury officials dismissed claims from local newspapers that the “IMF has raised alarm over the static Kenyan shilling.”
The reports, they said, misrepresent the IMF’s position and have sparked unnecessary public debate about the country’s exchange rate stability.
A senior Treasury official clarified that Kenya’s exchange rate is market-driven, backed by solid economic fundamentals and transparent policies that reflect real supply and demand conditions in the foreign exchange market.
According to the Treasury, the IMF’s latest Article IV Consultation Report—which some media outlets cited selectively—does not raise concerns about manipulation or rigidity.
On the contrary, the IMF notes that the shilling’s stability since early 2024 follows a period of volatility and signals renewed investor confidence, improved liquidity, and disciplined fiscal and monetary management.
The treasury warned that misinterpreting the IMF’s findings as a warning “distorts public understanding” of Kenya’s economic progress. Kenya’s external position has also strengthened over the past year.
As of October 23, 2025, foreign exchange reserves stood at USD 12.07 billion, equal to 5.3 months of import cover—well above regional and international benchmarks.
The reserves have been boosted by steady remittance inflows, a strong rebound in tourism, and rising exports of tea, horticulture, and manufactured goods. The Central Bank of Kenya (CBK) continues to operate a flexible exchange rate regime, intervening only to curb excessive volatility. This, Treasury said, is in line with global best practices and reflects CBK’s commitment to letting the market determine the shilling’s value.
Officials attributed the calm in the forex market to ongoing reforms that have made it more transparent and efficient. The Kenya Foreign Exchange Code has improved governance among market players, while the full liberalization of the interbank forex market earlier this year has increased competition and transparency—ensuring rates are based on real transactions rather than speculation.
The government also credits the shilling’s stability to sound macroeconomic management. Fiscal consolidation measures—such as tighter spending controls and stronger revenue collection—have eased domestic borrowing pressures and improved debt sustainability.
These efforts, combined with prudent monetary policy, have anchored inflation, aligned interest rates with economic fundamentals, and reduced exchange rate fluctuations.
Treasury emphasized that the shilling’s current stability is not artificial. Rather, it reflects confidence and discipline in economic management.
“Stability is not suppression—it is the reward for credible policies,” the statement read.
The IMF itself continues to show confidence in Kenya’s direction through its ongoing Extended Fund Facility (EFF) and Extended Credit Facility (ECF) programmes.
Looking ahead, the government reaffirmed its commitment to a flexible, transparent, and market-based exchange rate policy. Broader reforms aimed at diversifying exports, strengthening capital markets, and expanding investment in key sectors such as energy, manufacturing, digital infrastructure, and agriculture will continue to enhance economic resilience.
Treasury concluded that the shilling’s steadiness should not be viewed as a red flag, but as a sign of recovery, discipline, and growing confidence in Kenya’s economy.
Rising reserves, contained inflation, a narrowing fiscal deficit, and a confident private sector all point to an economy on a solid path to stability.
“The shilling’s performance is not the result of administrative control, but of market confidence built on reform,” the statement added. “Far from being a concern, it represents Kenya’s growing resilience and the success of consistent economic policies.”
by STAR REPORTER
