According to the CBK Weekly Bulletin released on June 26, 2026, the local currency recorded only marginal movement during the review period, supported by strong external reserves that remained well above the statutory minimum required to cushion the economy against external shocks.
The bulletin showed that the Kenyan shilling traded at Ksh129.63 against the US dollar on June 25, compared to Ksh129.55 recorded on June 18. The slight movement reflected continued stability in the foreign exchange market despite global economic uncertainties.
The Central Bank attributed the steady performance of the shilling to adequate foreign currency reserves and prudent monetary management aimed at maintaining confidence in the financial system.
As of June 25, Kenya's foreign exchange reserves stood at Ksh1.708 trillion, equivalent to 5.6 months of import cover. This remained comfortably above the statutory requirement of at least four months of import cover, providing a crucial buffer against external risks such as fluctuations in global commodity prices and exchange rate volatility.
The reserves also strengthen the country's ability to meet international payment obligations while supporting stability in the foreign exchange market.
The stable currency coincided with sustained investor confidence in government securities, with Treasury bills and Treasury bonds continuing to attract strong demand from both institutional and individual investors.
The Central Bank noted that the money market also remained liquid throughout the week as it continued to conduct open market operations to manage liquidity within the banking sector.
Commercial banks maintained excess reserves averaging Ksh16.7 billion above the mandatory Cash Reserve Ratio (CRR) requirement of 3.25 per cent, indicating that lenders had sufficient funds to support lending and meet short-term financial obligations.
The Kenya Shilling Overnight Interbank Average Rate (KESONIA), which measures the cost of overnight borrowing among banks, remained unchanged at 8.75 per cent during the review period.
The stable overnight rate suggested that short-term borrowing conditions within the banking sector remained balanced despite increased activity in the interbank market.
According to the CBK, the average number of interbank transactions rose significantly from 15 recorded in the previous week to 28 during the week ending June 25.
Similarly, the average value of funds traded between commercial banks increased sharply to Ksh16.1 billion from Ksh5.6 billion a week earlier.
The increase in interbank activity reflected continued confidence among financial institutions and adequate liquidity within the banking system as banks accessed short-term funds to meet operational requirements.
Beyond the money market, the CBK observed that broader financial market indicators also remained stable.
Government securities continued to record strong subscription levels during recent auctions, reflecting sustained investor appetite for fixed-income assets amid stable macroeconomic conditions.
The domestic bond market and equities market also maintained steady performance, supported by favourable liquidity conditions and improved investor sentiment.
The Central Bank said it would continue closely monitoring developments in domestic and international financial markets while using open market operations to ensure sufficient liquidity and maintain price stability.
Economists view the combination of a stable exchange rate, strong foreign exchange reserves and adequate banking sector liquidity as positive indicators for Kenya's macroeconomic outlook.
A stable currency helps contain imported inflation, reduces uncertainty for businesses engaged in international trade and enhances investor confidence in the economy.
The latest CBK figures suggest that Kenya's financial sector remained resilient during the week under review, supported by prudent monetary policy and healthy external reserves.
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