Kenya’s foreign-exchange reserves have surged to their highest level in three years as capital inflows into the country accelerate, and this can be seen in a stable Kenyan shilling amid global market volatility.
By November 7, 2024, reserves held by the Central Bank of Kenya (CBK) rose by 8.6% to reach $9.32 billion, compared to the previous week.
This level covers 4.8 months of imports, surpassing the central bank’s minimum target of 4.5 months to buffer against potential economic shocks.
The increase in reserves marks the 10th consecutive week of growth, largely supported by a $600 million disbursement from the International Monetary Fund (IMF).
According to BancTrust Investment Bank Ltd., the central bank’s efforts to rebuild reserves have been substantial, with a 40% rise in reserves year-to-date, even following the successful refinancing of Kenya’s $2 billion eurobond in June.
Also Read: Kenya’s Forex Reserves Drops to Ksh.63 Billion on Debt Repayment
Stable Shilling
Despite currency volatility in other emerging markets, the Kenyan shilling has held steady at 129 units per US dollar for seven straight sessions, up to November 13.
In contrast, other emerging-market currencies have been under pressure due to concerns over possible increased trade protectionism and inflation following recent global political developments.
BancTrust also said Kenya’s foreign-exchange reserves have been bolstered by a significant rise in remittance inflows.
The inflows are Kenya’s largest source of foreign exchange. This even as increased interest from foreign investors in local currency securities and a growth in exports have further contributed to this reserve build-up.
