Kenya’s foreign exchange reserves have declined by 51 billion to KES 844.3 billion ($6.566 billion) in the past month, resulting in the lowest level witnessed in over ten years due to the ongoing dollar crisis.
According to the Central Bank of Kenya’s weekly statistical report, the crucial reserve pool has fallen consecutively for the past weeks.
Kenya’s foreign exchange 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 reserves level is below the CBK’s statutory requirement of maintaining a minimum of four months’ worth of import cover. However, CBK mentioned that the remaining reserve was enough to cover 3.67 months of import.
The usable foreign exchange reserves remained adequate at $6.566 billion (3.67 months of import cover) as of March 10.
CBK Weekly Bulleting
The forex markets of the country have been troubled by an imbalance between the demand and supply of US dollars, resulting in importers paying more than the CBK’s official exchange rates.
Recently, manufacturers expressed their concern about the scarcity of dollars, which compelled them to buy at a premium compared to the CBK’s average exchange rate.
Fuel marketers have also reported the inadequacy of US dollars to purchase fuel and access their stocks at the KPC depots, causing fuel shortages in several petrol stations across the nation.
Also, retail buyers of dollars pay as high as KES 141 per unit in banking halls as the demand for dollars continues to soar.
Read Also: Forex Reserves Hit a 10-Year Low of KES 869 Billion
