Why Dutch exporters and East African importers can’t ignore exchange rates

Small exporters in the Netherlands selling into East Africa — and East African businesses buying Dutch machinery, inputs or agro-products — live and breathe the EUR ↔ local-currency rate. In 2025 the euro strengthened against several East African currencies (for example, EUR→KES moved from ~133 KES at the start of the year to averages around 145–150 KES later in 2025), amplifying costs for Kenyan buyers and squeezing margins for traders who price locally. Traders who invoice in euros gained predictability, while those who invoice in local currency absorbed unexpected currency costs. Exchange Rates

How this plays out on profit lines
There are three common scenarios: (1) Dutch seller invoices in EUR and East African buyer pays in euros — buyer faces higher local-currency cost if their currency weakens; (2) seller invoices in KES (or other local currency) — seller takes exchange-rate risk and can see margins evaporate if KES weakens against EUR; (3) hedged trades — when parties use forward contracts or FX hedges to lock rates. For small businesses, hedging costs and minimum contract sizes often make formal hedging unaffordable, which pushes many to absorb risk or add buffer margins. media.afreximbank.com

Macro shocks and trade policy risks
Exchange-rate swings are not only about central-bank moves: regional trade rulings, shifts in commodity prices, and trade agreements affect capital flows and currency stability. Recent legal and policy developments around trade agreements between Kenya and the EU have increased short-term uncertainty for exporters who rely on duty-free access or prefer predictable tariffs — uncertainty that can feed into currency volatility and funding costs. Reuters

Practical steps to protect profits (short checklist)

· Price in a currency you can control (consider EUR for exporters; be explicit in contracts).

· Use simple hedges where possible: multi-bank quotes, rolling forwards, or local FX providers that support SMEs.

· Layer contracts with currency clauses (e.g., CPI or FX pass-through bands).

· Keep a forex contingency in budgets (e.g., 3–7% buffer depending on corridor volatility).

· Explore trade finance tools targeted at African corridors to reduce FX funding risk. media.afreximbank.com

Call to Action
If you trade between the Netherlands and East Africa: review your last 6–12 months of invoices, identify which currency you and your partners use, and set one quick policy (pricing, a buffer percentage, or a pilot hedge) to deploy this quarter. Need help choosing a hedge or drafting FX clauses? Ask here — I’ll draft language and a 1-page checklist.

Comments / Your input
Have you been hit by a currency move this year? Which currency do you invoice in, and what tools (if any) do you use to manage FX risk? Leave a short comment — I’ll summarize practical reader solutions in the next update.