On Monday, November 19, 2018, Central Bank of Kenya data showed that the country’s official foreign exchange reserves had fallen to their weakest point in nine months after a steep monthly decline of Sh35.5 billion, or $344 million.
The latest figures put the reserves at Sh831.30 billion, equivalent to $8.063 billion, after a further weekly drop of Sh9.2 billion, or $89 million, from Sh840.47 billion ($8.152 billion) the previous week.
The last time the stock was lower was in the week ending March 8, when reserves stood at $7.155 billion, or Sh737.68 billion. They later climbed sharply to Sh910.48 billion, or $8.831 billion, after Kenya issued a Sh200 billion Eurobond that was oversubscribed in international markets.
At the latest level, the reserves covered 5.34 months of imports. That was one month below the year’s peak, when the cover reached 6.36 months on April 26, with reserves at Sh980.38 billion, or $9.509 billion.
The CBK does not usually publish details of its market interventions, but it has recently faced pressure from the International Monetary Fund to disclose more about its foreign exchange activity. The IMF has argued that the shilling is only partly shaped by market forces and could be weaker if left entirely to them.
The World Bank has also previously said the currency is overvalued because market forces do not fully determine its value. Beyond buying and selling foreign exchange, the CBK also uses reserves to repay foreign-currency debt on behalf of the Treasury and to settle state-to-state transactions.
