The Foreign Exchange (Forex) Market is the World's Most Liquid Market, with the most daily traded volume of any market or exchange in the world. According to BIS studies, in 2019, the average daily volume of the foreign exchange market was over $6.6 trillion.

You can trade one currency to another through foreign exchange trading in Kenya. One such currency that can be traded for another is the Kenyan Shilling (KES).

 A snapshot scenario of trading the KES

Forex trading in Kenya consists of the buying and selling currency pairings against one another with the hope of profiting from fluctuations in the value of the paired currencies.

Consider the pair KES/USD, where KES is the Kenyan Shilling and USD is the US Dollar. You may exchange 100 KES for 1 USD. As a currency, KES cannot compete with the US dollar. Therefore, we must pay 500,000 KES if we wish to purchase $5,000 USD.

Now, let's say KES appreciates in value. In such instance, we'll need fewer Kenyan Shillings (KES) to purchase one U.S. Dollar. That would also mean that you would earn more KES in exchange for selling a dollar. The sum of KES you paid and KES you received represents your profit.

As such, profitable foreign exchange trading requires research into various currency pairs and an understanding of when and where to make investments.

 A closer look at the Kenyan Shilling (KES)

Kenya is located in East Africa and uses the Kenyan Shilling (KES) as its official currency. After Kenya gained its independence from British colonial rule in 1963, the shilling was established in 1966 to replace the East African Shilling at par.

The issuance and management of Kenyan Shillings are the purview of the Central Bank of Kenya. The value of one Kenyan Shilling relative to another is set by supply and demand under a system known as a floating exchange rate.

If the need arises, the Central Bank of Kenya may intervene in the foreign exchange market to keep it stable and prevent wild swings.

The Kenyan Shilling is able to maintain some stability under this system despite its responsiveness to external shocks and changes in global market circumstances.

 Economic drivers of the Kenyan shilling

The agricultural, industrial, service, and tourist sectors are all important to Kenya's economy. Many Kenyans rely on the agricultural sector for their livelihood, especially the production of staples like tea and coffee.

But the country's economy is beset by issues like widespread unemployment, low wages, and graft.

The Kenyan government has been formulating plans to alleviate poverty, provide employment opportunities, and boost economic growth and foreign investment.

 Final Thoughts

The value of the currency is set by market forces and possible intervention from the Bank, according to a floating exchange rate system.

There are opportunities for profit to be gained from gaining the Kenyan Shilling as long as you do so astutely, using a sound Forex trading strategy and by keeping tabs on relevant market movements.

Forex trading has a high level of risk, even for well-informed, experienced investors and traders. If you're just getting started in Forex or CFD trading, it's crucial that you invest as much time as possible into learning about the underlying ideas, dangers.