The Kenya shilling recorded a marginal decline in the week against major international currencies. The Central Bank of Kenya (CBK) quoted the shilling at Ksh106.96 against the US dollar on July 9 compared to Ksh106.54 per US dollar on July 2.
In the week, the shilling averaged Ksh106.72 against the US Dollar, Ksh133.42 against the Sterling Pound, Ksh120.34 against the Euro, and Ksh99.26 against the Japanese Yen.
The shilling was under pressure due to increased dollar demand from merchandise importers and the energy sector due to the easing of COVID-19 restrictions. In addition, economic activity is resuming following the lifting of the intercounty lockdown on June 6. Kenya is an import-based economy thus importers will need more dollars as international trade gradually returns.
CBK further reveals that foreign exchange reserves remained adequate at Ksh1.036 trillion ($9,704 million) equivalent to 5.83 months of import cover as at July 9. This meets the CBK’s statutory requirement to endeavor to maintain at least 4 months of import cover, and the EAC region’s convergence criteria of 4.5 months of import cover.