Kenya’s Forex reserves up 2.4% to Ksh.884.2 bn as it struggles to attain threshold

Kenya’s foreign exchange reserves posted an improved performance from the previous week to Ksh.884.2 billion, according to the latest data by the Central Bank of Kenya (CBK).

This is a 2.4 percent performance compared to Ksh.863.2 billion it posted the previous week.

The import cover signifies 3.63 months of import cover but falls below the 4.5 months threshold of the East African Community.

“This meets the CBK’s statutory requirement to endeavor to maintain at least 4 months of import cover,” said CBK.

Import Cover measures the number of months of imports that can be covered with foreign exchange reserves available with the central bank of the country – says the IMF.

In East African Community, the threshold has been set at 4.5 months as essential for the stability of a currency.

The dwindling in reserves has a ripple effect on the local currency, which has continued to feel the pinch against the dollar.

In the week to April 24, 2023, the Shilling dropped by 0.7 percent against the US dollar to Ksh 135.4, from Ksh.134.4.

Pressure on the shilling is coming from importers, especially oil and energy sectors.

On a year-to-date basis, the shilling has depreciated by 9.5% against the dollar, adding to the 9.0% depreciation recorded in 2022. 

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Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.

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