The Kenyan shilling is expected to strengthen against the U.S. dollar over the coming week, with forex traders attributing the anticipated gains to increased inflows of foreign currency through diaspora remittances.
According to market analysts, the local currency could edge higher against the dollar by next Thursday, making it one of the stronger-performing currencies in the region.
Diaspora Remittances Supporting the Shilling
Forex traders say the main factor behind the shilling’s resilience is the steady flow of dollars sent home by Kenyans living abroad.
These remittances have continued to boost the country’s foreign exchange reserves, increasing the supply of dollars in the local market and helping support the value of the shilling.
As of Thursday, July 9, commercial banks traded the shilling at 129.15/35 per dollar, compared with last Thursday’s close of 129.20/40, indicating continued stability in the local unit.
Ruto Administration Banking on Overseas Workers
President William Ruto’s administration has increasingly relied on Kenyans working abroad as part of its strategy to stabilise the shilling.
The government has been expanding labour export programmes by facilitating employment opportunities for Kenyan workers in various countries, with the expectation that higher remittances will strengthen foreign exchange inflows.
Kenyans Abroad Sent Home Ksh931.8 Billion
A recent report by the Central Bank of Kenya showed that between June 2024 and June 2025, Kenyans in the diaspora remitted Ksh931.8 billion.
The report, published on June 16, 2026, revealed that:
United States
Largest source
Maintained its position as the biggest contributor
Ksh405 billion
Middle East
Saudi Arabia, Qatar & UAE
Significant inflows
The figures point to a widening spread of Kenya’s remittance sources beyond traditional markets.
Why a Stronger Shilling Matters
A stronger shilling is generally considered beneficial for the economy because it helps reduce the cost of imports, including:
- Fuel
- Machinery
- Pharmaceuticals
- Industrial raw materials
- Other goods purchased in U.S. dollars
Since most international trade is conducted in dollars, a stronger local currency reduces pressure on foreign exchange demand and helps stabilise prices in the domestic market.
Relief Amid Middle East Tensions
The positive outlook comes at a time when there had been concerns that the shilling could weaken due to escalating tensions in the Middle East, which risk disrupting global trade and increasing demand for safe-haven currencies such as the U.S. dollar.
Analysts now say strong remittance inflows have helped cushion the Kenyan currency against those external pressures.
Outlook for the Coming Week
With diaspora inflows remaining robust and foreign exchange reserves adequately supported, traders expect the shilling to maintain its stability and potentially record modest gains against the dollar in the coming days.
Market participants will continue monitoring remittance trends, global oil prices, and developments in international markets, all of which could influence the shilling’s performance in the weeks ahead.