This archive report was first published on 5 August 2020.
On July 30, 2020, Kenya's foreign exchange reserves stood at $9.336 billion, representing 5.66 months of import cover, according to data from the Central Bank of Kenya.
This was a decline from $9.717 billion on July 2, 2020, which covered 5.84 months' worth of imports.
The drop in reserves came at a time when the shilling was under pressure against the dollar, raising the potential for volatility in the market.
Analysts pointed out that the Central Bank of Kenya has mainly relied on mopping up excess liquidity in exchange rate operations, suggesting that external payments were another reason for the reserves decline.
According to Genghis Capital head of research Churchill Ogutu, the regulator's mop-up of Sh495.2 billion through open market operations dwarfs the roughly Sh40 billion dip in reserves, which he attributed to external debt obligations settlement in July.
