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Forex reserves inch closer to Sh1trn mark on new loans

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US dollars at a forex bureau in Nairobi. FILE PHOTO | NMG

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Summary

  • The reserves are nearing the Sh1 trillion mark, having increased from by Sh4.37 billion from Sh987.22 billion ($9,261 million) from the previous week.

The Central Bank of Kenya’s (CBK) usable foreign exchange reserves have increased to Sh991.59 billion ($9,302 million) in the week ending June 11, due to the high foreign fund disbursements to support the country against the adverse effects of coronavirus.

CBK data has shown the reserves are nearing the Sh1 trillion mark, having increased from by Sh4.37 billion from Sh987.22 billion ($9,261 million) from the previous week.

“This meets the CBK’s statutory requirement to endeavour to maintain at least four months of import cover, and the EAC region’s convergence criteria of 4.5 months of import cover,” said the CBK. Analysts have attributed the rise to previous loans and grants by international bodies as a cushion from the pandemic, which has led to job losses and a reduction of export income.

“This is partly as a result of the disbursement including the African Development Bank loan in the order of Sh22.51 billion ($225 million) that helped in offsetting settlement of external debt obligations made,” said Churchill Ogutu, head of research Genghis Capital.