Kenya’s foreign exchange reserves dropped to the lowest level in July, after consistent growth in the past four weeks. The forex reserves, which are often used as a shield against foreign exchange volatility, declined to $9.371 billion last week, compared to $9.621 billion the previous week according to data from the Central Bank of Kenya (CBK). Kenya has the largest stockpile of foreign currency reserves in the East African region.
The current reserves are sufficient to cover 5.73 months of import, above the Central Bank’s legal requirement of at least 4 months of import cover and EAC’s requirement of at least 4.5 months of import cover.
The value of the Kenya shilling remained steady against major international and regional currencies in the last week. It exchanged at KSh 108.20 per US dollar on 22nd July, a slight dip from KSh 108.03 per US dollar on 15th July.
In the primary bond market, Acorn successfully raised KSh 2.1 billion from the final tranche of its green bond, against a target of KSh 1.4 billion. Bond turnover in the secondary market fell by 36.2% in the week that just ended.
According to CBK, Commercial banks’ excess reserves, which consist of cash owned by the bank and stored physically in the bank vault, increased to KSh 22.4 billion in the last week, from KSh 1.7 billion the previous week. The average number of interbank transactions per day fell to 11 from 14 in the previous week. Similarly, the average interbank rate, which is the rate of interest charged on short-term loans made between banks, dipped to 3.05% on July 22, from 3.83% on July 15.