CBK weekly bulletin for the week ending July 24 shows that the Kenya shilling weakened, diaspora remittances rebound in June, and the forex reserves declined.
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Remittances Rebound
Remittance inflows recorded a 12% growth to $288.5 million in June 2020 from $258.2 million in May. The cumulative inflows also recorded a 1.5% growth in the 12 months to June totaling $2,809 million compared to $2,768 million in the 12 months to June 2019. Inflows from the US, South Africa, and Saudi Arabia recorded the highest increases in the 12 months.
Kenya Shilling
The week saw the shilling hit a record low of Ksh108.42 against the dollar, with CBK quoting the shilling at KSh108.13 per US dollar on July 23 compared to KSh107.35 per US dollar on July 16. CBK blames increased demand for dollars in the interbank market for the volatility.
The shilling depreciated against other major currencies, averaging KSh135.96 per Sterling Pound, KSh123.39 per Euro, and KSh100.46 per Japanese Yen in the week.
Read Also: Kenya Shilling plunges to a new low of 108.20 against the US Dollar
Fx Reserves
The usable forex reserves declined by $248 million in the week to $9,421 million (5.72 months of import cover) as of July 23 compared to $9,669 million at the close of last week. CBK maintains that the FX reserves remain adequate and meet the statutory requirement to maintain at least 4 months of import cover, and the EAC region’s convergence criteria of 4.5 months of import cover.
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