This archive report was first published on 2 September 2021.
Kenya's foreign exchange reserves have dipped below $9 billion for the first time in eight weeks, according to data from the Central Bank of Kenya (CBK). As of August 26, the country's forex reserves stood at $8.986 billion, down from $9.189 billion a week earlier.
The decline in forex reserves is attributed to a decrease of $203 million in the past week. Despite this, the CBK notes that the foreign currency reserves are sufficient to cover 5.49 months of imports, exceeding the statutory requirement of at least 4 months of import cover.
Kenya has the largest pile of foreign currency reserves in East Africa. However, the reserves have been on a downward trend in the past three weeks, falling by $366 million to the current level of $8.986 billion. This is after reaching a peak of $9.621 billion on July 15.
The Kenya Shilling slightly weakened against major international and regional currencies during the week ending on August 26. It exchanged at KSh 109.71 per US dollar on August 26, compared to KSh 109.49 per US dollar on August 19.
According to data released by the Central Bank, the money market was liquid during the week ending August 26, supported by government payments, which partly offset tax remittances. Commercial banks' excess reserves stood at KSh 13.2 billion compared to KSh 13.4 billion the previous week.
