Currency Risk Is Not Optional — Only Whether You Choose It

An investor holding only shilling-denominated assets often describes themselves as having no currency exposure. In fact they have a total, undiversified position in a single currency — they simply are not counting it, because it is the currency they think in.

Two ways to be wrong

Holding everything in shillings means your entire net worth depends on one currency's purchasing power. Holding everything offshore means your assets and your actual liabilities — which are in shillings — are mismatched.

Neither extreme is a considered position.

Sizing the exposure

The useful question is what proportion of your future spending will be in which currency. School fees abroad, medical costs, travel and imported goods all argue for some foreign-currency exposure. Rent, local services and most day-to-day living argue for shillings.

Match the exposure roughly to the liability, then accept that you will never get it exactly right — and that roughly right beats accidentally concentrated.