Kenyan Shilling Defies Gravity—Outperforms USD in Stunning Reversal
Move over, dollar dominance—Nairobi’s currency just schooled the forex markets. While the Fed plays whack-a-mole with inflation, Kenya’s shilling has quietly staged a 12% rally against the greenback since January. Not bad for a currency Wall Street ’experts’ wrote off last year.
Behind the surge: A brutal 6.5% central bank rate hike in February finally tamed inflation, while diaspora remittances hit record highs. Meanwhile, US Treasury yields wobble as the debt ceiling circus enters its 15th act.
But before you dump your dollar ETFs: This is the same shilling that lost 23% in 2023. Emerging market currencies love a redemption arc—until the next Fed meeting, at least.
Source: MarketWatch
On Friday’s trading session, the Kenyan shilling came out on top of the US dollar in the currency markets. This is the second time the local currency has beaten the USD in three trading sessions. The dip comes after the DXY index fell to the 101.5 mark after moving ahead from 99 to 101 this month.
Currency: Kenyan Shilling & the US Dollar
The Kenyan shilling is displaying more stability than the US dollar in the currency market this month. Traders are closely monitoring the development and might consider taking an entry position in the local currency. If the greenback begins to decline back to the 98-98 range, the shilling will deliver decent profits.
As of May 2025, the USD has dipped nearly 8.4% against a basket of major global currencies. It is now much weaker than it was a year ago, indicating that the room for a decline is stronger. Several factors have led to its dip, including trade wars, tariffs, and monetary policies. The advantage of the Kenyan shilling against the US dollar is that the country’s inflation is comparatively lower.
In addition, their purchasing power remains stable while Americans are finding it hard to cope with rising prices, as wages are not catching up. There is no arguing that the US dollar is far superior to the Kenyan shilling, and the recent upward trajectory is only temporary. It won’t take much time for the USD to reclaim its top spot in the global forex markets.
