The Central Bank of Kenya (CBK) has said it will go into a buying spree of $100 million every month between March and June to increase foreign reserves.
The regulator says this has been informed by new developments across the globe, including a significant drop in oil prices, have opened a new window for a more formal dollar purchase programme.
“This would bolster CBK’s preparedness to deal with heightened global volatility and uncertainties,” William Nyagaka, Director Financial Markets Department said in a Banking Circular to all chief executives of commercial banks.
“These purchases will be conducted while ensuring that they do not introduce volatility and instabilities in the foreign exchange market,” the bank said.
In its weekly bulletin, the CBK disclosed that its usable foreign exchange reserves remained adequate at $8.409 billion (5.11 months of import cover) as at February 27.
“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 CBK in the weekly bulletin.