Kenya’s shilling rallies the most in 16 years on $1.5bn Eurobond sale

On Wednesday, the Kenyan shilling experienced its most significant intra-day surge against the US dollar in the past 12 years, benefiting from a surge in investor confidence following substantial inflows received by the government to repay a $2 billion Eurobond due in June through a tender offer.

This surge propelled the local currency to its highest level since November of the previous year, completely erasing all losses incurred earlier in the year. The shilling has recorded its most substantial rally in nearly 16 years and is poised for its eighth consecutive day of gains, positioning it for an approximately 10% appreciation against the US dollar during this period.

The surge in the shilling's value coincides with a wave of selling of dollars by locals, prompted by speculation that a successful Eurobond sale has alleviated concerns of a shortage of the US currency. Earlier this week, Kenya issued a new $1.5 billion Eurobond maturing in 2031, which it plans to utilize to repurchase a significant portion of the $2 billion bond.