In Kenya, the money people use, called the shilling, became 17% more powerful compared to the US dollar this year. The Central Bank of Kenya, which is like the country’s big money helper, lowered the cost of borrowing money. They did this because prices for things didn’t go up as much anymore.
In September, a group in Kenya called the Kenya National Bureau of Statistics said that prices for things went down. They used a special number to show this, 3.6%, which was lower than the number from before, 4.4%.
Because things got cheaper, the big money helpers in Kenya decided to make it even cheaper to borrow money.
The shilling, or Kenyan money, got stronger by 17%. This means people don’t need as much of it to buy one US dollar, falling from needing 160 shillings in January.
How the Money Market is Changing
In 2024, Kenya’s money became much stronger. This was a big change because, in 2023, it got weaker and weaker, losing 29% of its strength against the dollar.
In January 2024, one dollar cost 160 shillings. But then, in February, the shilling started to get better, getting back 8% of what it lost. By March, it was even stronger, needing only 131 shillings to match one dollar.
As things got cheaper, the shilling kept getting stronger and stayed below 129 shillings for a dollar by October.
Reasons the Shilling Got Stronger
In January, the shilling was at its weakest, but it started getting better when prices for things like food and housing got lower.
When February came, prices got lower, and the shilling grew 8% stronger. In March, it got even better as prices kept falling, reaching 131 shillings for a dollar.
Between March and August, cheaper food and rides helped prices to go even lower, to 4.4%.
On August 6, 2024, Kenya’s big money group decided to make borrowing money a bit cheaper, hoping to help the economy by changing the Central Bank Rate from 13.0% to 12.75%.
More recently, the bank made this rate even less, to 12%, so people could borrow money more easily and help the economy grow more.
All these things helped the shilling get stronger since January and stay strong through October 2024.
What People are Saying
Kenya’s Finance Minister said that good farming, strong services, and better exporting will help Kenya keep growing.
The Central Bank also said, “The committee saw that people weren’t borrowing as much money and noticed slower growth, so they decided it’s okay to make borrowing easier.”
By making borrowing money easier and cheaper, Kenya can help local businesses and keep its money strong.