Kenya has spent nearly $1 billion of its foreign exchange reserves to defend the shilling against excessive weakness triggered by the Iran conflict, central bank governor Kamau Thugge revealed Thursday. The massive intervention underscores the strain regional conflicts place on emerging market currencies, particularly those dependent on imports and foreign investment.

Thugge indicated the central bank remains ready to deploy additional firepower if needed to stabilize the currency. Kenya's foreign reserves have been under pressure as investors reassess risk in East Africa following geopolitical tensions that have roiled global markets. The shilling has faced significant depreciation pressure amid capital outflows and reduced investor confidence.

The central bank's aggressive stance signals Kenya's determination to maintain currency stability despite external shocks. With nearly $1 billion already deployed, policymakers face difficult choices about balancing reserve depletion against the need to prevent destabilizing currency volatility that could fuel inflation and economic uncertainty.