This archive report was first published on 19 May 2020.
On May 19, 2020, the Central Bank of Kenya (CBK) announced that its foreign exchange reserves had reached a four-month high of $8.532 billion, equivalent to 5.14 months of import cover.
The significant increase in reserves was attributed to the disbursement of a $739 million economic support loan from the International Monetary Fund (IMF), which was received by the Treasury and subsequently sold to the CBK in exchange for shillings.
CBK governor Patrick Njoroge had earlier told a Senate committee on May 7 that foreign exchange reserves were projected to remain adequate through 2020, thanks to additional financial flows from international finance institutions, including the IMF rapid credit facility of $745 million and the World Bank's $1 billion.
According to Njoroge, foreign exchange reserves were projected to close the year at about five months of import cover.
The CBK's forex reserves had been falling steadily over the past four months, partly due to external payment obligations and a decline in inflows from sectors such as tourism and horticulture, which have been affected by the Covid-19 outbreak.
Since the beginning of the year, the shilling has seen its exchange rate against the dollar depreciate by 5.6 percent, to 107.03 units to the greenback.
