On November 11, 2024, the Central Bank of Kenya (CBK) reported that the Kenyan shilling traded at KSh 129.22 per US dollar, reflecting a notable improvement from KSh 160 per US dollar in January 2024 [4e4ee0ae]. This strengthening of the shilling is attributed to strong foreign currency inflows, with reserves increasing to $9,323 million, sufficient to cover 4.8 months of imports [4e4ee0ae]. The rise in reserves follows the International Monetary Fund's (IMF) approval of $606 million (KSh 78.1 billion) in October 2024, which has bolstered investor confidence in the Kenyan economy [4e4ee0ae].
The Energy and Petroleum Regulatory Authority (EPRA) recently announced new fuel prices, revealing that while petrol and diesel prices remain unchanged at KSh 171.60 and KSh 188.84 respectively, the price of kerosene has dropped by KSh 3.43 to KSh 158.32 as of September 14, 2024 [4e5dff22]. This adjustment comes in light of a decrease in the landed cost of imported fuel, with petrol prices decreasing by 1.53% from US$708.47 to US$697.62 per cubic meter [4e5dff22].
The stability of the Kenyan shilling has played a crucial role in easing inflationary pressures in the country, which has seen inflation rise to 4.4% in August 2024, up from 4.3% in July, primarily due to higher fuel costs [4e5dff22]. Economist Daniel Kathali noted that the current economic conditions are fostering a favorable environment for the currency, which is essential for maintaining purchasing power and competitiveness in the international market [9524c080].
Furthermore, NSE-listed firms with dollar-denominated loans have reported profits of KSh 6.2 billion in 2024, a significant turnaround from the KSh 15.9 billion loss recorded in the same period of 2023 [2cc782d0]. Companies such as Kenya Airways have notably benefited, turning around from a loss of KSh 23.7 billion in H1 2023 to a profit of KSh 513 million in H1 2024 [2cc782d0].
As the US Federal Reserve hints at potential interest rate cuts, analysts suggest that this could further enhance the outlook for Kenya's stock market and attract foreign investment, reversing capital outflows that have affected emerging markets since March 2020 [c1418dfd]. Overall, the combination of rising foreign currency reserves and the recent adjustments in fuel prices signals a cautiously optimistic economic outlook for Kenya [2cc782d0][c1418dfd][4e5dff22].