This archive report was first published on 26 July 2021.
Kenya's foreign exchange reserves have been on a downward trend, with a significant drop in July. According to data from the Central Bank of Kenya (CBK), the forex reserves declined to $9.371 billion last week, compared to $9.621 billion the previous week.
This decline marks a drop of $250 million in just one week, a concerning trend for the country's economic stability. Despite this, Kenya still maintains the largest stockpile of foreign currency reserves in the East African region.
The current reserves are sufficient to cover 5.73 months of import, exceeding the Central Bank's legal requirement of at least 4 months of import cover and the EAC's requirement of at least 4.5 months of import cover.
The value of the Kenya shilling remained steady against major international and regional currencies in the last week, exchanging at KSh 108.20 per US dollar on 22nd July, a slight dip from KSh 108.03 per US dollar on 15th July.
On a more positive note, Acorn successfully raised KSh 2.1 billion from the final tranche of its green bond, exceeding its target of KSh 1.4 billion. However, bond turnover in the secondary market fell by 36.2% in the week that just ended.
Commercial banks' excess reserves increased to KSh 22.4 billion in the last week, from KSh 1.7 billion the previous week. The average number of interbank transactions per day fell to 11 from 14 in the previous week, while the average interbank rate dipped to 3.05% on July 22, from 3.83% on July 15.
Read more about Kenya's economic trends: Kenya's Foreign Exchange Reserves Down 10% YTD
