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Kenya’s top banks have seen a sharp drop in foreign exchange income as the Kenyan shilling holds steady, wiping out approximately Sh9 billion in revenue.
The Central Bank of Kenya (CBK) reports that reduced volatility in the shilling limited trading opportunities, squeezing income that banks normally earn from currency movements.
The shilling has traded narrowly around Sh129–130 against the US dollar since July 2024, maintaining this tight range through early June 2025.
A senior banking analyst commented, “A stronger shilling has slashed forex income for top Kenyan banks by Sh9 billion,” noting that fewer currency swings leave less room for profitable trades.
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Historically, banks have profited from aggressive buying and selling amid forex volatility. But the current stability, while good for importers and exporters, limits this source of non-interest income.
The CBK attributed the shilling’s steadiness to a mix of consistent remittances, strong foreign exchange inflows, and balanced demand and supply dynamics.
Still, with forex income dwindling, banks must now lean more on interest-bearing lending, fees, and digital services to sustain profitability.
The stability of the shilling could also benefit consumers by lowering inflation risks tied to currency swings. But for banks, it signals a need to recalibrate revenue models.
