The Kenya Shilling has been ranked by the World Bank as the top-performing currency in sub-Saharan Africa, attributed to the Central Bank of Kenya’s decision to raise the base lending rate. This measure has bolstered confidence in the currency and spurred demand.
The World Bank’s report also forecasts a 5% growth for Kenya’s economy in 2024. This marks a significant endorsement of Kenya’s economic trajectory.
Comparatively, the Zambian kwacha initially saw a 14% strengthening by mid-February but later experienced a slight depreciation, recording a year-to-date appreciation of 2.4% as of mid-March. Similar to Kenya, Zambia’s monetary authority also raised interest rates to safeguard its currency.
Kenya’s ability to secure funds for the repayment of its Eurobond due in June 2024 has further enhanced confidence in the local currency, as noted by the World Bank.
Recently, during the Monetary Policy Committee (MPC) meeting, the Central Bank of Kenya (CBK) announced its decision to maintain the base lending rate at 13%. This decision was influenced by various factors, including the strengthening value of the Kenyan shilling.
Following the MPC meeting in April, Kenya’s stock market has experienced a remarkable turnaround, transitioning from its previous worst performance to the forefront. Experts attribute this positive shift to the attractiveness of Kenyan shilling-denominated investments, driven by the higher base lending rate, which promises increased returns for investors.
