Central Bank of Kenya (CBK) official foreign exchange reserves plunged to a new low of $8.2 billion when markets closed on October 22, 2020, further piling pressure on the Kenya Shilling Exchange rate against the greenback. This is a drop of $615 Million within a month.
Weekly data from the CBK shows a consistent decline in the official forex reserves held at the CBK vaults from $8.838 billion on September 17, 2020, $8.627 billion on September 24, 2020, $8.533 billion on October 1, 2020, $8.454 billion on October 8 and $8.223 billion on October 22, 2020.
These figures translate to a depletion of the import cover from 5.36 months as at September 17, 2020, to 4.99 months on October 22, 2020.
Pressure on the Kenya Shilling is apparent with CBK quoting the local unit at KSh108.75 against the greenback on October 22, compared to KSh108.61 per US dollar on October 15, 2020. Commercial Banks and forex dealers have been trading the Shilling beyond the KSh109 level.
Forex inflows from diaspora remittances, a critical source of dollars for Kenya, declined from $274.1 Million in August, 2020 to $261.7 Million in September 2020.
According to CBK data, the cumulative diaspora remittances inflows in the 12 months to September 2020 totalled $2.967 billion. This is against $2.786 billion in the 12 months to September of the prior year.