Kenya Shilling Ranked Second Most Popular Currency in Africa Despite Weakening Against Dollar

  • Kenyan Shilling (Ksh) continues to send economic shock waves as it depreciates against the US dollar.

    As of Friday, March 17, the Ksh was trading at a high of Ksh140 against the dollar indicating a depreciation of the Kenyan legal tender which on January 2020 was trading at Ksh99.

    Despite the weakening of the Ksh against the dollar, the currency maintained its dominance as one of the most sought-after legal tender in the African continent based on XE Currency Popularity Rankings.

    A file image of someone counting Kenyan money

    A file image of someone counting Kenyan money


    According to the ranking, Ksh was only bettered by the South African Rand in terms of popularity.

    The Ksh further performed remarkably well globally after being ranked 36th while the South African Rand was ranked seven globally.

    In East African Community, Uganda was the second most popular currency, ranked 88 globally.

    Other EAC countries ranking were; Tanzania (108), Rwanda (145), and Burundi (153).

    Democratic Republic of Congo (DRC) did not feature in the ranking while South Sudan was ranked using Sudan Dinars which was ranked 134 globally.

    Popularity ranking is a scale used to determine the most preferred currencies for trading.

    According to International Monetary Fund (IMF), the more popular a currency is, the more useful it is to those who hold it.

    For example, according to the XE Currency Popularity Ranking, an international investor trading in Uganda would prefer to be paid in Ksh instead of Ugandan Shilling (Ush).

    According to IMF, once a currency becomes popular, it takes years to lose its ranking in the international market.

    Even if individuals should have the incentive to switch to another currency, they would have to convince many other agents to make the same switch before it would become worthwhile to do so,” IMF explains why Ksh will continue being a force in the continent.

    IMF further explains what makes a currency popular compared to others in the regional and international markets.

    “First, there needs to be confidence in its value and, therefore, in the issuing country’s inflation performance,” IMF states.

    The monetary fund adds that there needs to be confidence in the political stability of the issuing government for a currency to gain popularity.

    Kenya has been one of the most politically stable countries in Africa after three peaceful transitions of power.

    “Lastly, the issuing country should possess financial markets that are substantially free of controls, broad (that is, containing a wide variety of financial instruments), and deep (that is, having well-developed secondary markets),” IMF explains.

    The top five most popular global currencies include; the US Dollar, Euro, the UK Pound, India Rupees and the Australian Dollar.

    File image of Kenyan bank notes

    File image of Kenyan bank notes


Beryl Onyango

Beryl Onyango is a CPA and economics degree holder who has dedicated her career to helping others navigate the complex world of finance. Beryl has spent the past 3 years working as a finance specialist in a fintech company and has 6 years of experience in finance, working with a diverse range of clients and industries. Beryl's expertise lies in budgeting, saving, investing, and retirement planning, but she also has a deep understanding of various other areas of finance. She is interested in financial technology and how it changes how we manage our finances. As a finance writer, Beryl has been sharing her insights and knowledge through her writing, covering various finance and personal finance topics. Her goal is to educate and empower individuals to take control of their finances and achieve their financial goals. In addition to her professional experience, Beryl is a lifelong learner, always seeking to expand her knowledge and stay up-to-date with the latest developments in finance. She is also a strong communicator, able to explain complex financial concepts in a clear and easy-to-understand manner. Beryl believes that financial literacy is the key to achieving financial success, and she is dedicated to helping others achieve their financial goals.

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