The amount of foreign exchange reserves held by the Central Bank of Kenya rose for the third consecutive week to $7.73 billion as of 22nd April from $7.66 billion a week earlier. The reserves have grown by $384 million since the start of April.
According to the Central Bank, the reserves are sufficient to cover 4.75 months of imports, above the statutory requirement of at least 4 months of import cover and above the EAC requirement of at least 4.5 months of import cover.
In the past week, the shilling weakened against major international and regional currencies to exchange at KSh108.42 per US dollar on April 22 compared to KSh 106.81 per US dollar on April 15, largely due to increased demand for the US dollar by importers and large corporations.
Liquidity in the money market was relatively tight as companies remitted taxes. However, government payments boosted the amount of money in circulation. According to data from the Central Bank of Kenya, the value of interbank transactions fell to KSh11.2 billion from KSh13.9 billion the previous week. The average interbank rate rose to 5.6% in the week through 22 April, from 4.5% the previous week.
Excess reserves held by commercial banks amounted to KSh5 billion in the week that ended on 22nd April, compared to a shortfall of KSh6.2 billion recorded the previous week.