What You Need to Know
The Kenyan shilling has strengthened marginally against the U.S. dollar, trading at 129.53. The Central Bank of Kenya warns that inflation could peak at 6.2% by July 2026 due to rising oil prices linked to geopolitical tensions. Despite this, the shilling’s stability is attributed to diversified foreign exchange inflows and adequate reserves.
Africa-Press – Kenya. The Kenyan shilling edged higher against the U.S. dollar this week, even as the Central Bank of Kenya warned that inflation could climb to its highest level in years by mid-2026, driven by an oil price shock traced to the ongoing conflict in the Middle East.
The shilling exchanged at 129.53 per U.S. dollar on April 9, strengthening slightly from 129.99 on April 2, according to the CBK’s weekly bulletin.
The move was modest but represented a measure of stability that policymakers have worked to preserve through a turbulent stretch of global commodity price volatility.
CBK attributed the currency’s resilience to “diversified foreign exchange inflows, increased confidence in the economy and adequate foreign exchange reserves”.
Foreign exchange reserves stood at USD 13,316 million as of April 9, equivalent to 5.7 months of import cover, well above the statutory minimum of four months the central bank is required to maintain.
That cushion is being tested. Crude oil prices have surged since the escalation of the U.S.-Israel-Iran war, with the Strait of Hormuz closure disrupting shipping and cutting supply from major producing nations.
Murban crude rose to USD 90.33 per barrel on April 9, up from USD 89.45 just a week earlier on April 1, and dramatically higher than the USD 60.6 per barrel low recorded in late 2025.
On Tuesday, Kenyans will learn how much they will have to contend with at the pump, with many expecting fuel prices to rise.
The CBK’s Monetary Policy Committee, which met on April 8, warned that international oil prices have “risen sharply and remained volatile due to supply disruptions and elevated uncertainties attributed to the war in the Middle East. ” Damage to oil infrastructure in the region has compounded the supply crunch, the committee said.
The effects are rippling through Kenya’s inflation outlook in ways that concern policymakers. CBK’s own projections show that without the oil price shock, overall inflation would stay between 4.5 and 5.0 per cent comfortably through the coming year.
With it, the central bank projects inflation peaking at 6.2 per cent by July 2026, still within the upper limit of its 5±2.5 per cent target band but the highest level projected since the country’s inflationary spike of 2023.
Kenya’s headline inflation stood at 4.4 per cent in March 2026, up marginally from 4.3 per cent in February, remaining below the midpoint of the target range. The MPC said it expected inflation to remain anchored “supported by appropriate monetary policy actions, expected stability in food prices attributed to favourable weather conditions and a broadly stable exchange rate”.
But the committee acknowledged the risk is real and growing. It said there is “a need to monitor any second-round effects of the recent increase in international oil prices on overall inflation”, a signal that the bank stands ready to act if rising fuel costs begin feeding through to broader price pressures across the economy.
The Kenyan economy has faced various challenges, particularly in managing inflation and currency stability. In recent years, external factors such as global oil price fluctuations and geopolitical conflicts have significantly impacted economic projections. The Central Bank of Kenya has been proactive in monitoring these developments to mitigate adverse effects on the economy and maintain a stable currency.
Historically, Kenya has experienced inflationary pressures, notably in 2023, when inflation spiked due to similar external shocks. Policymakers are now focused on ensuring that inflation remains within the target range while addressing the risks posed by volatile oil prices and their wider
