The reserves, held at the Central Bank of Kenya (CBK), stood at $7.91 billion (Sh902.1 billion) on March 3, down from $8.13 billion (Sh926.8 billion) on February 24.
Total external debt obligations during the month were $244.2 million (Sh27.8 billion), which are paid out of the reserves.
CBK does not disclose the details of its forex dealings, which include payments for the government’s external obligations and purchases and sales in the local market in support of shilling stability.
Kenya’s official forex reserves fell by $217 million (Sh24.7 billion) in the last week of February on external loan repayments to the Trade and Development Bank (TDB) and creditors of the country’s second Eurobond.
The reserves, held at the Central Bank of Kenya (CBK), stood at $7.91 billion (Sh902.1 billion) on March 3, down from $8.13 billion (Sh926.8 billion) on February 24.
Total external debt obligations during the month were $244.2 million (Sh27.8 billion), which are paid out of the reserves.
The TDB accounted for the biggest share of repayments, with the Treasury forking over $108.5 million (Sh12.3 billion) in principal repayment, and an additional $1.6 million (Sh182 million) in interest to the pan-African multilateral lender.
CBK does not disclose the details of its forex dealings, which include payments for the government’s external obligations and purchases and sales in the local market in support of shilling stability.
In the last two weeks, the shilling has come under increased pressure from a globally strengthening dollar due to the uncertainty brought by Russia’s invasion of Ukraine, raising the possibility that the regulator might have sold dollars to prevent volatility in the local forex market.
External debt repayments however remain the biggest source of outflows from the official dollar account.
In addition to the TDB loan repayment, the government also paid bondholders their semi-annual interest worth $77.5 million (Sh8.84 billion) for Kenya’s second Eurobond that was issued in February 2018.
The $2 billion (Sh228 billion) bond was issued in two equal tranches, comprising a 10-year paper that carried a coupon of 7.25 percent and a 30-year paper at 8.25 percent, payable semi-annually in February and August.
The World Bank’s International Development Association was the third-highest single recipient of foreign loan repayments last month, taking up $38.4 million (Sh4.4 billion) in interest and principal repayments.
The drain on the government’s dollar reserves is expected to ease slightly this month when total dues for external loan repayments stand at $170.7 million (Sh19.5 billion).
The country’s current account is however facing strain due to the conflict in Ukraine, which has disrupted tea and flower exports to Russia and raised import costs.
