Kenya’s foreign currency reserves rose steeply after the IMF on Wednesday approved the disbursement of $410 million to support Kenya’s budget. The country’s forex reserves jumped from $7.474 billion on 17th June to $8.114 billion on 24th June, the highest level since November 2020. According to the Central Bank of Kenya, the reserves are adequate to cover 4.96 months of imports, above the statutory requirement of at least 4 months of import cover.
Kenya’s major sources of foreign currency reserves are agricultural exports, overseas remittances, tourism, and loans and grants from international organizations. The elevated level of foreign exchange reserves will enable Kenya to meet its foreign-denominated debt obligations, deal with short term economic shocks, and support the shilling from decline.
During the week ending June 24, the Shilling remained stable against major international and regional currencies. It exchanged at KSh 107.77 per US dollar on June 24, compared to KSh 107.80 per US dollar on June 17.
Excess reserves held by commercial banks, which are funds available to be invested in loans or other assets, fell to KSh 10.3 billion from KSh 15.3 billion the previous week. The average value of interbank transactions rose sharply to KSh 12.7 billion
compared to KSh 7.5 billion in the previous week. Similarly, average interbank rates increased to 5.00% on June 24 from 4.48% on June 17.
The amount of gross domestic debt reached KSh3.676 trillion on 18th June, comprised of KSh2.829 trillion in treasury bonds, KSh766 billion in treasury bills, KSh56 billion in Central Bank Overdrafts, and KSh24 billion in other domestic debt.
Related: Kenya’s Foreign Currency Reserves Drop to 3-Year Low
