World Bank’s Africa Pulse Report, released in April 2024, has spotlighted the Shilling as Sub-Saharan Africa’s top performing currency. With an impressive 16% appreciation rate this year, Kenya’s currency has taken the lead.
This surge in the Shilling’s value can be attributed to recent monetary policies implemented by the Central Bank of Kenya (CBK), fostering heightened demand for the local currency. Additionally, Kenya’s activity in the Eurobond market during February contributed to the Shilling’s strengthening against the Dollar.
Joining Kenya in the ranks of appreciating currencies is the Zambian Kwacha, which, although experiencing a dip after a 14% surge in mid-February, has still managed a year-to-date appreciation of 2.4% as of mid-March. Both Kenya and Zambia’s central banks took measures such as interest rate hikes and adjusting reserve ratios to bolster their currencies.
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On the contrary, some currencies continue to depreciate due to factors like insufficient foreign reserves and mounting national debts. Notably, the Nigerian Naira has faced a significant 41% year-to-date depreciation in the official market by mid-March. This decline stems from various factors, including limited Dollar inflows amidst decreased foreign investments and crude oil export receipts.
Amidst these fluctuations, the Malagasy Ariary from Madagascar also saw appreciation this year, showcasing a diverse landscape of currency performance across the region.
