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Stable shilling cuts banks’ losses from regional units
When the shilling strengthens, the translated value of a bank’s regional assets falls—as was the case last year—since their home units translate into fewer Kenyan shillings.
The shilling’s stable run against the dollar and regional currencies in Eastern Africa helped Kenyan banks slash their translated foreign currency losses from regional subsidiaries to Sh528 million last year, from Sh57 billion in 2024.
A weaker shilling results in a higher value of dividends and assets reported by subsidiaries in the region, and the opposite is true when the local currency appreciates.
