Kenya’s foreign exchange reserves declined by 8.715 billion dollars to 8.287 billion dollars in the week ended Jan 28, according to CBK data.
In the previous week ended Jan. 20, the reserves were at 8.7 689 billion dollars.
The fall in reserves was due to higher demand for dollars from importers to meet their end-month.
Besides the decline, the forex reserves remain adequate and continue to provide cover and a buffer against short-term shocks in the foreign exchange market.
The new reserves cover 5.07 months of import cover, down from 5.33 months of cover.
“The usable foreign exchange reserves remain adequate. They meet 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.
Shilling depreciate by 0.1%
Similarly, during the week, the shilling declined to exchange at 114 against the dollar, down from 113, a 0.1 per cent depreciation.
This is the lowest the Kenyan shilling has ever depreciated against the dollar.
On a YTD basis, the shilling has depreciated by 0.4 per cent against the dollar, in comparison to the 3.6 per cent depreciation recorded in 2021.
However, the Central Bank on Thursday noted that there was not much volatility in the foreign exchange rate.
“Markets were well behaved and therefore, there are no concerns about the performance of the shilling or for that matter the performance of the FX market,” Governor Patrick Njoroge said post MPC meeting.