Kenya’s forex reserves declined to 88 months-low of KES 870.7 Billion in the last week, according to data from the Central Bank of Kenya (CBK).
The Central Bank of Kenya (CBK) reported that Kenya’s forex reserves declined to $7 billion(KES 870.7), equivalent to 3.92 months of imports, in its weekly bulletin last Friday.
This decrease is due to repayments to foreign lenders and the CBK’s efforts to stabilize the depreciating shilling.
This month, Kenya is expected to repay $506.7 million (KES 63 billion) in foreign debt, according to the World Bank public debt tracker.
The shilling has weakened to an average of KES 124.35 per dollar, compared to KES 113.57 a year prior. The reserves dropped from $7.38 billion or 4.13 months of imports on January 19 to $9.62 or 5.89 months of import cover on September 5, 2021.
The Central Bank of Kenya (CBK) says a fall in Kenya’s forex reserves below the minimum four-month import cover is a “non-event” and not a cause for alarm.
The IMF disbursed a $447.39 million loan to Kenya in December, increasing the reserves to 4.22 months of import cover.
By June, Kenya expects $750 million from the World Bank, which will further boost the reserves.
However, the local currency has remained weak due to a lack of dollar inflows, unlike other regional currencies that have gained.
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