Kenya’s forex reserves have fallen to a 10-year low of KES 869 Billion, further breaching the critical level of four months’ import cover, according to official data from the Central Bank of Kenya (CBK).
Kenya’s reserves have been depleting mainly due to the repayments to bilateral and commercial lenders and the CBK’s intervention to try and slow down the shilling’s depreciation against the US dollar.
The forex reserves have remained below the four months’ import cover since January 26, dropping by KES 66 billion during the two weeks.
This comes at a time when the country was expected to repay foreign debts estimated at KES 63 billion, according to the World Bank tracker of public debt.
The government is betting on debt inflows to shore up the reserves, with concessional funding from the World Bank and the International Monetary Fund (IMF) expected to boost the forex cover.
Kenya now waits for the disbursement of KES 93.9 billion ($750 million) from the World Bank by June this year and continued flows from IMF’s 38-month KES 293.1 billion ($2.34 billion) programme.
The country is further betting on re-entry to the international capital markets to rebuild the cover by issuing either a Eurobond or a syndicated loan.
Read also; Kenya’s Forex Reserves Drop to 88 Months-Low of KES 870.7 Billion.
