This archive report was first published on 9 September 2019.
Kenya's Central Bank forex reserves have been on a downward trend, hitting a 9-week low of Sh957 billion in the latest update.
According to data from the Central Bank of Kenya, the reserves fell by $34 million or Sh3.53 billion last week, a smaller decline compared to the previous week's $134 million (Sh13.9 billion) drop.
Despite the decline, the Central Bank of Kenya noted that the reserves remain sufficient, exceeding both the country's and EAC minimum threshold of import cover.
As of September 5, the CBK's usable foreign exchange reserves stood at $9.218 billion (5.76 months of import cover), meeting the statutory requirement to maintain at least four months of import cover and the EAC region's convergence criteria of 4.5 months of import cover.
However, the cover level is the lowest since July 4, when they stood at $9.02 billion equivalent to 5.74 months of import cover.
The falling reserves have come at a time when the dollar demand has gone up, putting pressure on the shilling's exchange rate, which stood at 103.82 at close of trading last week.
Although the Central Bank of Kenya can intervene by selling dollars into the market to stave off volatility, the regulator does not disclose when it intervenes in the market either by buying or selling dollars, and the amounts involved.
