What is the Kenyan shilling (KES)?
The Kenyan Shilling (KES) is the official currency of the Republic of Kenya. It is used in Kenya, Sudan, and Somalia. The shilling is in turn divided into 100 cents. The prices often include the abbreviation KSh, as in “100 KSh” to refer to 100 shillings. KES is the currency trading symbol (FX).
- The Kenyan Shilling (KES) is the national currency of the African nations of Kenya, Sudan, and Somalia.
- KES remains one of the most stable currencies in East Africa.
- KES circulates in nearby countries as a more stable option for storing wealth than local currencies.
Understanding the Kenyan Shilling (KES)
In 2009, the KES / USD exchange rate had reached approximately 75 shillings to the US dollar, but over the following years it weakened to a rate of more than 105 shillings to the dollar in 2015 and again in 2017. Since 2016, the Kenyan shilling has been it has remained suspended around the 100 mark against the dollar as concerns mount about the amount of public debt that Kenya has assumed over the years. As of January 2021, USD $ 1 equals approximately 110 KES.
The Kenyan shilling is among the most stable currencies in East Africa. In fact, it often circulates in neighboring countries with less stable currencies, such as Sudan and Somalia. Although less volatile than other regional currencies, the Kenyan shilling exchange rate has generally weakened relative to the US dollar over the past decade.
The Kenyan shilling was first introduced in 1966 to replace the East African shilling. That currency had circulated in British-controlled areas of East Africa from the 1920s to the early 1960s, when Kenya (and other African countries) gained independence from British rule. Due to recent changes to Kenya’s constitution prohibiting portraits of individual persons, the country began issuing new banknotes and coins in 2018.
The Central Bank of Kenya it manages the nation’s currency and allows its exchange rate to float freely against others in the global foreign exchange market. The central bank operates under a mandate to maintain price stability, maintain liquidity in the country’s financial system, and support growth and employment.
KES and the Kenyan economy
The relative valuation of a currency such as the Kenyan shilling against other currencies depends, to a large extent, on the desire of individuals and organizations to hold shilling-denominated assets. This is partly influenced by how other trading partners view Kenya’s potential for economic growth and stability.
According to the World Bank, while Kenya’s economy has stagnated in recent years, the annual growth rate of the country’s gross domestic product (GDP) has increased, reaching 5.8% in 2016. That annual growth rate ranks Kenya as one of the fastest. growing economies in sub-Saharan Africa and only reached 5.4% in 2019. Kenya’s GDP growth is due, in large part, to an increase in tourism and investment in the nation’s infrastructure.
World Bank data also shows that per capita gross national income (measured in US dollars) in Kenya doubled between 2006 and 2016 and that the nation’s GDP (also measured in US dollars) more than doubled, increasing by $ 25.8 billion to $ 70.5 billion above that value. Same period. The caveat is that Kenya’s public debt as a percentage of national output is now 60% compared to around 40% in 2013.
M-Pesa is a mobile banking service that allows users to store and transfer money through their mobile phones. M-Pesa was introduced in Kenya as an alternative way for the country’s population to access financial services. Safaricom, Kenya’s largest mobile phone operator, launched M-Pesa in 2007. The service is a combination of two entities in which SUBWAY means mobile and Weight means money or payment in the Swahili language.
Cash collected from M-Pesa is deposited into Safaricom bank accounts. Bank accounts serve as regular checking accounts and are insured up to a maximum of 100,000 KES (or approximately $ 1,000) by the Deposit Protection Fund.