Kenya’s Current Account deficit increased to 5.4% of the GDP in the 12 months to July 2021 compared to 4.9% of the GDP in the
12 months to July 2020 according to data from the Central Bank of Kenya. A current account deficit occurs when a country spends more money on imports than it receives from its exports. The Increased current account deficit shows the negative impact of the covid crisis on Kenya’s economy.
The Central Bank said, “The higher deficit was attributed to lower service receipts as well as high imports, which more than offset increased receipts from agricultural exports and remittances.”
Kenya posted a $5.5 billion current account deficit in June this year compared with a $5.1 billion deficit posted in June 2020.
Foreign currency reserves held by the Central Bank of Kenya fell for the fourth straight week to $8.883 billion as of September 2 from $8.986 billion as of August 26 2021.
According to CBK’s weekly bulletin, commercial banks’ excess reserves, which consist of cash holdings physically held by the banks, fell to KSh13 billion last week from KSh13.2 billion the previous week.
Also read: Kenya’s Current Account Deficit Widens to 5.5% of GDP
