Kenya Shilling Holds Steady Against the Dollar; FX Reserves Drop 

The Kenyan shilling held steady against major international and regional currencies during the week ending Sept. 17  in quiet trade from importers.

The Kenyan shilling held steady against major international and regional currencies during the week ending Sept. 17  attributable to increased dollar demand from the energy sector.  

In the week, the shilling averaged KSh 110.03 per US dollar on September 16, compared to KSh 110.10 per US dollar on September 9 a marginal depreciation of 0.2 per cent. 

FX Reserves

In addition, the Central Bank Weekly bulletin for the week showed that usable foreign exchange reserves remained adequate at USD 9,619 million (5.88 months of import cover) as at September 16.

The reserves had declined by USD 10 million from USD 9,629 in spite of the  CBK reporting a surge in diaspora remittances for the month of August. 

Money Market

NCBA Research team had anticipated liquidity to tighten somewhat in line with the settlement bonds. 

“This will coincide with tax remittances, traditional build-up of bank reserves at the onset of the Cash Reserve Ratio (CRR) cycle as well as liquidity boost in anticipation of the end of quarter and year reporting. This could, however, be temporary. Anticipated government payments could help offset the pressure,” they had noted on Monday.

“Commercial banks’ excess reserves stood at KSh 3.9 billion in relation to the 4.25 per cent cash reserves requirement (CRR). Open market operations remained active. The average interbank rate was 4.19 per cent on September 16 compared to 3.62 per cent on September 9,” the Central Bank reported.

The average interbank volumes increased by 21.6 per cent to Kshs 17.2 billion, from Kshs 13.7 bllion recorded the previous week.

Kenya’s Total Receipts at Ksh 125.3 bn in Aug.; Domestic Borrowing at Ksh 200.3 Bn