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In a brief and surprising burst, Kenya’s shilling hit an all-time high of 73.50 to the U.S. dollar on Thursday at 6 p.m. local time, only to retreat to more typical levels within 30 minutes. The fleeting spike — which saw the shilling trade at values last recorded decades ago — triggered a frenzy on X, with Kenyans questioning and speculating over the unusual event.

The brief rally, which had currency traders scrambling for answers, is likely due to a “liquidity squeeze” — a rare scenario where limited currency is available in the market, causing abrupt shifts in exchange rates.  Experts explained that this could occur when large transactions are cleared in a narrow window, pulling shilling liquidity into specific accounts and temporarily affecting the currency’s price.

During periods of illiquidity or lower trading volumes, as seen in the early evening in Nairobi’s currency market, large trades can cause disproportionate shifts. When traders observe sharp movements in either direction, some may jump in to take advantage of a potential trend, further amplifying the fluctuation. This activity can explain why the shilling quickly retracted to its usual range once the initial spike lost momentum.

Currency traders and analysts believe the temporary appreciation could have been triggered by the government settling external debts or a large remittance from Kenyan expatriates, as inflows tend to increase at month-end and during festive periods. Foreign currency supply from export sectors, such as tea and horticulture, may also have contributed. However, with Kenya facing a significant dollar shortages, such gains are challenging to sustain.

Another factor may have been automated trading and high-demand trades in the Kenyan financial market, particularly from foreign investors buying government bonds. With Kenya offering attractive yields on its bonds to attract foreign investment, the shilling often strengthens briefly as investors convert dollars into the local currency. However, such rallies are usually short-lived because Kenya’s economic fundamentals — especially its ongoing high import costs and heavy external debt — generally keep the shilling under pressure.

As news spread, X lit up with reactions, making with some users celebrating what appeared to be a moment of financial strength, with one user tweeting, “If we can do 73.50, why not 70? Let’s keep it going!” Others, however, expressed skepticism. “Just for 30 minutes? Feels like an April Fool’s prank,” tweeted another user. Many were quick to question if the currency’s sudden leap was manipulated or a technical glitch.

Kenya’s Central Bank, typically reserved in its communications, wasn’t even bothered by the shillings sharp rise, and didn’t even make a post acknowledging the brief high nor reassuring the public that market dynamics caused the temporary price movement. It only tweeted an indicative rate of 129.19 of the US dollar, followed by results of treasury bills auction of the day.

Though temporary, the event highlighted the shilling’s volatility and sparked debate about Kenya’s economic stability. The country’s currency has faced significant pressure in recent years, reaching record lows of 164 to the dollar as imports outpace exports and external debt remains high. As of Friday morning, the shilling was back to trading at around 129.10 against the dollar, erasing any gains from the previous evening.

Economists note that while brief spikes can sometimes reflect a surge in foreign currency inflows or shifts in market sentiment, the underlying challenges facing the Kenyan economy remain. “A 30-minute spike doesn’t change Kenya’s inflation, trade deficit, or debt obligations,” said Sila Obegi, an economist  and CEO of Meta Capital. “However, it underscores the importance of strengthening Kenya’s foreign reserves to reduce volatility.”

For ordinary Kenyans, however, the shilling’s high remains a curiosity, a blip that underscored just how sensitive — and unpredictable — the currency market can be.