Forex Reserves Dip as Kenya Shilling Hits Kshs 109.9 to the Dollar

The Kenyan shilling strengthened against the dollar week ending September 10 due to a slowdown in demand for hard currency.

Kenya’s forex reserves continued to decline in the week ended  September 3 by KSh11 billion to KSh977.1 billion.

According to the latest CBK weekly bulletin, the reserves fell to $8.883billion(KSh977.1billion) from $8.986 billion (KSh988.4 billion) the previous week, a KSh11.3 billion decline.

“The reserves are equivalent of 5.43 months of import cover. This meets the CBK’s statutory requirement to endeavor to maintain at least 4 months of import cover, and the EAC region’s convergence criteria of 4.5 months of import cover,” the Central bank said.

Cytonn Investments notes that from  August, the Kenya Shilling depreciated by 1.2% against the US Dollar to close the month at Kshs 109.9, from Kshs 108.6 recorded at the end of July 2021.

Cytonn attributes this to increased dollar demand from general importers outweighing the supply of dollars from importers.