Speaking to TUKO.co.ke, Kenya Association of Manufacturers chief operating officer (COO) explained that the strength of the shilling has been positive for local manufacturing since February 2024 TUKO.co.ke journalist Wycliffe Musalia brings over five years of experience in financial, business, and technology reporting, offering deep insights into Kenyan and global economic trends. Kenyans could continue to enjoy cheaper products in the market as the shilling rallies against the US dollar. 

Local manufacturers reported an ease in the cost of production for the past two months since the shilling regained strength in February 2024. The local currency exchanged at KSh 127.16 per dollar on Monday, April 8, proving its position among the best-performing global currencies. 

How strong shilling lowers consumer prices The COO added that with a weaker dollar, Kenyan manufacturers are able to import raw materials at fair prices, making the cost of production affordable. He added that the drop in the cost of production will translate to reduced consumer prices in the market. "We are looking at it from the manufacturer's angle. We import a lot of raw materials and accessing them at an affordable rate will make our production cost lower and offer affordable prices to the final consumer.

In 2023, KAM warned of rising costs of production exacerbated by the weakening shilling. KAM CEO Anthony Mwangi warned that the cost of imports, production, and distribution of raw materials and goods will continue to shoot should the shilling continue to depreciate. 

Is stronger shilling affecting Kenya's export market? Alando further averred that the strength of the shilling reduces the profit margin for exporters. He explained that traders exporting produce, especially through the Africa Growth and Opportunities Act (AGOA), when the dollar is weaker than the shilling, are now counting reduced profit margins. "However, for someone doing exports like flowers, especially under AGOA, with a weaker dollar it means their profit margin is lower. You will not be making much profit," said Alando. 

The strength of the shilling in February and March 2024 hit the majority of Kenyans and businesses earning in US dollars. Tables turned when the Central Bank of Kenya (CBK) propped up the shilling against the US dollar, which saw the shilling appreciate. 

What to know about Kenya shilling gaining strength The Central Bank of Kenya (CBK) deployed various measures in the opening weeks of February 2024, propping up the shilling against major global currencies, especially the US dollar. In March 2024, the Kenya shilling regained strength to trade at KSh 139 per dollar, a move that saw it lower import costs and rank among the world's best-performing currencies. On Tuesday, April 9, the Central Bank of Kenya (CBK) official shilling rate stood at 130.2 compared to 131.17 on April 4.