Central Bank of Kenya (CBK) Governor Dr Kamau Thugge has assured that the shilling will hold steady against the US dollar despite global pressures, citing a USD619 million balance of payments surplus and strong reserves. He expressed optimism amid Middle East conflict and US trade policy uncertainties. Talks with the IMF continue for a new program after the previous one expired.
Governor Thugge gave the assurance while addressing concerns over external economic pressures, particularly US trade policies unsettling currencies in emerging markets.
“We have taken into account much lower export growth. We have assumed a deceleration in remittances. We have assumed tourism receipts, lower growth in tourism receipts,” he said, highlighting the cautious approach.
Even so, the Ksh80 billion surplus remains solid, providing confidence that Kenya's external finances can absorb the current global economic turbulence.
Thugge noted that foreign exchange reserves were deliberately built to cushion against such shocks. “We were waiting for this kind of shock. That is why we built up our reserves to the level where they are now,” he stated, adding that exchange rate volatility remains manageable.
Separately, the CBK is negotiating with the International Monetary Fund (IMF) for a new funded program after the previous $3.6 billion (Ksh850 billion) arrangement expired in March 2025 without full disbursement.
That 38-month deal under the Extended Credit Facility and Extended Fund Facility lapsed, leaving Kenya without a Ksh110 billion (USD850 million) tranche.
“On the issue of the IMF, we did have an IMF mission last month. We will continue those discussions in Washington later on this month, and we hope for positive outcomes,” Thugge said. An IMF mission is expected in early 2026 alongside Article IV consultations.
The assurance follows the shilling's weakening last week on April 1 to Ksh130.0200 per dollar amid heightened importer demand for foreign currency.
