This archive report was first published on 11 May 2020.
Kenya's economy is facing a perfect storm as the country's foreign exchange reserves have hit a record low, breaching the regional statutory threshold of 4.5 months of import cover.
According to the Central Bank, the country's forex reserves have fallen 13% in the past four months to $7.74 billion (4.66 months of import cover) in April, down from $8.88 billion (5.4 months of import cover) in January.
Over the past 12 months, the reserves have dropped by 24% from a high of $10.12 billion (an equivalent of 6.4 months of import cover) in May 2019.
As a result, the Kenyan shilling has lost six percent of its value to trade at a record low of Ksh107.29 against the dollar on April 30, compared with Ksh101.6 against the greenback in January.
Kimani Ichung'wa, the chairman of the parliamentary Budget and Appropriation Committee, has raised a red flag over the country's dwindling forex reserves, warning that it leaves the economy exposed to both local and external shocks.
