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Kenya, 1 November 2025 - The Central Bank of Kenya (CBK) has painted an overall picture of economic stability, with key indicators pointing to resilience across inflation, the exchange rate, foreign reserves, money market activity, and the equity market.
In its weekly bulletin for the period ending 30 October 2025, the CBK said Kenya’s financial system continues to demonstrate strength amid a mix of domestic and global headwinds.
The report highlights steady consumer prices, a firm local currency, and a sound reserve position that provides a strong cushion against external shocks.
Headline inflation held at 4.6 percent in both September and October 2025, reflecting sustained price stability.
The CBK attributed this to easing prices of several food items and moderate increases in other essential goods.
At the same time, core inflation which excludes volatile food and energy costs dropped slightly from 2.9 percent to 2.7 percent, suggesting that underlying price pressures remain contained.
However, non-core inflation, mainly influenced by fuel and transport costs, climbed marginally to 9.9 percent from 9.6 percent, signaling that energy price movements still pose some risk to overall inflation trends.
The CBK noted that the overall inflation environment remains within the government’s target range, supported by stable food supplies, improved agricultural output, and lower global commodity prices compared to the same period last year.
The Kenyan shilling remained broadly stable against major international and regional currencies during the week under review.
It exchanged at KSh 129.24 per U.S. dollar on 30 October 2025, unchanged from the previous week, demonstrating continued confidence in the domestic currency.
The stability was underpinned by robust foreign exchange reserves, which stood at USD 12.19 billion, equivalent to 5.3 months of import cover.
This comfortably exceeds the statutory minimum of four months and offers a vital buffer to cushion the economy against potential external pressures such as oil price shocks or exchange rate volatility.
Currency market analysts say this performance reflects sustained foreign investor confidence, steady diaspora remittances, and a measured approach to monetary policy that has helped keep speculation in check.
In the domestic money market, liquidity conditions remained adequate throughout the week. Commercial banks maintained excess reserves averaging KSh 12.4 billion above the 3.25 percent Cash Reserve Ratio (CRR).
The Kenya Shilling Overnight Interbank Average Rate (KESONIA) was stable at 9.26 percent, showing minimal movement week-on-week.
However, interbank transactions slowed, averaging 23 deals per day, down from 30 the previous week.
The total traded value also eased from KSh 14.5 billion to KSh 11.3 billion, reflecting slightly lower activity, possibly linked to short-term liquidity adjustments or end-month settlements by banks.
With inflation contained, exchange rate stability maintained, and the banking system liquid, Kenya’s financial sector appears well-positioned to support continued growth as the economy heads into the final quarter of 2025.
