Kenyan Shilling Continues to Decline against Euro, Sterling Pound in August
- The Kenyan shilling has weakened against the euro and the sterling pound since the beginning of August
- The shilling remained relatively stable against the US dollar, trading at around KSh 129.24 throughout the first half of August
- Terence Hove attributes the dollar’s softer tone to expectations of US Fed rate cuts, weak labor data, and slowing economic momentum
Elijah Ntongai, an editor at TUKO.co.ke, has over four years of financial, business, and technology research and reporting experience, providing insights into Kenyan, African, and global trends.
The Kenyan shilling has been on a losing streak against the major European currencies.
Source: UGC
Kenyan shilling versus Euro and Sterling pound
At the beginning of the month, on August 1, one euro exchanged for KSh 147.65. The euro has gained to trade at KSh 151.38 on August 18 based on the indicative rates released by the Central Bank of Kenya (CBK).
The sterling pound traded at KSh 170.58 on August 1 and has kept a positive trend to trade at KSh 174.49 on August 18.
Therefore, the Kenyan shilling has depreciated by 2.53% against the euro and 2.29% against the sterling pound.
How did the Kenyan shilling perform against the US dollar?
In its latest bulletin, the CBK noted that the shilling has remained relatively stable against the US dollar.
The US dollar has exchanged at an indicative rate of KSh 129.24 since August 1, having dropped to KSh 129.23 on August 6 only.
Speaking to TUKO.co.ke, Terence Hove, the senior financial markets strategist at Exness, noted that the US dollar is exhibiting a softer tone.
Hove added that the Dollar Index (DXY) has been trading around 98.10 – 98.20 levels, reflecting a modest decline amid rising expectations that the Fed will ease monetary policies.
"Markets are pricing in a high probability of a rate cut in September, eroding the dollar’s yield advantage and weighing on sentiment. Recent weak labor data and slowing economic momentum have heightened recession concerns, accelerating bets on Fed cuts and increasing the dollar’s vulnerability. Although geopolitical tensions and new tariffs typically support safe-haven flows, current market dynamics suggest risk-off sentiment is triggering outflows, not inflows, into the dollar," Hove exclusively told TUKO.co.ke.
"Anticipate a sideways to mildly bearish trend in the near term, with potential for further downside if economic data continues to disappoint. Volatility may increase around key US releases and Fed commentary in the coming weeks," Hove added.
How much is Kenya's forex reserves?
In other news, the CBK has continued to sustain sufficient foreign exchange reserves.
The regulator reported that as of August 14, the usable foreign exchange reserves remained adequate at USD 11.112 billion (KSh 1,436,054.88 million), sufficient cover for 4.9 months of import cover.
Notably, diaspora remittances have been a key source of foreign exchange for Kenya, with the US being the main source of the remittances.
CBK reported that the 12 months' cumulative inflows to July 2025 increased by 11.1% to USD 5.080 billion (KSh 656.47 billion) compared to USD 4.572 billion (KSh 591.06 billion) in a similar period in 2024.
Proofreading by Jackson Otukho, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
