The Kenya Shilling on Monday officially recovered to the 120s against the US dollar for the first time in nearly two years.
The gains came as the official indicative exchange rate by the Central Bank of Kenya (CBK) placed the shilling at 129.3960.
These gains came after weeks of gains and losses in which the local currency oscillated between 130 and 133 against the greenback.
On Monday, the gains by the shilling were felt in the exchange market with Forex Bureaus selling the dollar at between 129 and 130.
Satellite Forex Bureau sold the dollar at 129.9 while Pacific Forex Bureau sold the dollar at 130.2.
The local currency also recorded gains against other major currencies with the indicative exchange rate placing it at 164.6499 against the Sterling Pound and 139.9547 against the Euro.
The Kenya shilling was last in the 120s exchange bracket nearly two years ago. It then embarked on a losing streaked that bottomed out in February 2024 at a shocking low of 162 to the US dollar.
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The shilling’s recovery was ignited in February when the government made a partial payment of the Eurobond debt due for maturity this month.
The National Treasury announced in a notice that it had bought back $1.44 billion out of the outstanding $2 billion of its 2014 Eurobond, opting to utilize the entire amount it raised from a new bond that was issued in early February to partially retire the older paper.
The bond, whose sale concluded on February 13, raised a gross amount of $1.5 billion, which netted at $1.46 billion after payment of lead arranger fees.
The current gains come in the wake of an announcement by the CBK Governor Kamau Thugge that the government will use funds from the newly acquired loan from World Bank to settle the pending Eurobond debt that is maturing this month.
This move will see Kenya use a portion of the Sh. 156 billion it has freshly received from the World Bank to repay the outstanding Eurobond debt balance of Sh. 65.3 billion that comes into maturity on June 24, 2024.
“Part of the disbursement will be used to settle the $500 million of the remaining Eurobond debt,” said Mr. Thugge.