Kenya’s forex reserves increased to their highest in 2025 owing to high dollar inflows from exports as the shilling maintained stability.
- •Last week, reserves held by the Central Bank of Kenya (CBK) increased by US$332 million to bring the total to US$9.219 billion.
- •The 3.7% increase marked a second consecutive increase in 2025 from US$8.9 billion a week earlier with the shilling stalling at 129.19.
- •The current reserves are enough to cover 4.7 months of imports, both falling above the 4 months statutory requirements and the EAC’s convergence requirement of 4.5 months of import cover.
According to the CBK, the current usable reserves are at their highest in nominal terms, having hit a 3-year high in November 2024 to bring the total to US $9.323 bn at the time.
“The usable reserves of the CBK stand at the highest level in nominal terms and we were only previously close in 2019 and 2021 after the issuance of some Eurobonds,” CBK Governor Kamau Thugge said on Thursday.
The CBK expects forex reserves to increase by US$1.45 billion in 2025, mainly from the International Monetary Fund (IMF) and the World bank disbursements.
“The surplus together with the expected IMF disbursements is projected to result in a buildup of gross reserves by US$1.45 billion,” CBK Governor, Dr. Kamau Thugge said in the post monetary brief on Thursday.
The Trump Effect, and IMF
US President Donald Trump’s executive order freezing US foreign aid will partly affect foreign inflows to African economies, including Kenya’s. The CBK governor however said he doesn’t expect any substantial impacts on the exchange rate.
“We do not see much impact on the exchange rate from the freeze on aid,” Dr Thugge said, “What could affect the exchange rate perhaps is if there’s a significant reduction in remittances from the US.”
Earlier, Finance Cabinet Secretary John Mbadi said Kenya had begun talks with the International Monetary Fund (IMF) for a new lending programme as the current programme lapses in April 2025. The CBK governor said the government was keen on having a new programme after the current one lapses.
“The level of reserves in 2024 was based on the good performance in the current account. The reserve position continues to be strong, adequate, and sufficient to cover short-term external shocks,” Dr Thugge said.