The Central Bank of Kenya (CBK) has projected continued stability for the Kenya Shilling against the U.S. Dollar, citing tightly controlled interbank lending rates as of this month.

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The dollar currently trades at Ksh129.41, a rate that the CBK says reflects growing confidence in Kenya's monetary framework.

At the heart of this stability is the Kenya Shilling Overnight Interbank Average (KESONIA), which now balances the Central Bank Rate (CBR) at exactly 8.75 per cent, according to CBK Governor Kamau Thugge.

“This framework has continued to support the stability of the Kenya Shilling overnight interbank average, and this has now been aligned and is aligned very closely to the CBR,” stated Governor Thugge.

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Adding, “And this alignment should enhance monetary policy transmission, and as you can see, even in the last few months, KESONIA is actually very close to the CBR, and as of June 2026, you can see that the CBR rate was at 8.75 per cent, and the interbank rate, the KESONIA, was also at the same level, 8.75 per cent.”

That alignment matters more than most Kenyans realise because it tells foreign investors that the local banking system is liquid, orderly, and not under stress.

It also implies that when banks borrow from each other at rates matching CBK's own target, it removes one of the biggest fears in any emerging market, a cash squeeze.

That kind of squeeze has historically triggered panic buying of the U.S. Dollar by businesses and speculators, which then sends the Kenyan Shilling sharply lower.

This also comes at a time when CBK announced on June 9 that it will be  retaining its benchmark lending rate at 8.75 per cent in what will be a slight relief for borrowers across the country.

CBK cited rising global inflationary pressures linked to the ongoing conflict in the Middle East and the need to keep domestic inflation expectations anchored as part of the reason why the lending rate was retained at 8.75 per cent to cushion Kenyans.

📰 Source: Kenyans.co.ke