Kenya Forex reserves up by $64 million on dollar inflows from diaspora remittances

Kenya’s 2 and 15-year Treasury Bonds Raise Ksh 32bn

Kenya’s foreign exchange reserves have risen by USD 64 million to USD 8.05 billion helped by dollar inflows from diaspora remittances and tightening liquidity, according to Genghis Capital data in the week ending January 18.

“Usable foreign exchange reserves held at the central bank rose by USD 64Mn to USD 8.05Bn; equivalent to 5.27 months of import cover,” said Genghis Capital in their 3rd Weekly Fixed Income Report this is compared to week 2, which saw the reserves decline by USD 36Mn to USD 7.98Bn equivalent to 5.23 months of import cover.

According to Genghis, the local currency remained relatively unchanged during the week supported by dollar inflows from diaspora remittances coupled with the tightening liquidity in the money market which offset dollar demand from merchant and oil importers.

During the week, the Kenya Shilling remained relatively flat against the US Dollar, to close at Kshs 101.7 from Kshs 101.8 recorded previously.

This was attributed to reduced merchant and oil importer demand supported by tight liquidity in the market and inflows from diaspora remittances.

Cytonn Investments said the lower interbank rate pointed to improved liquidity conditions, experienced during the start of the week partly attributed to government payments. However, “Liquidity declined as at the end of the week, with the interbank rate rising to 3.3% as at 18th January 2018, from a low of 1.6% as at the start of the week, mainly attributed to tax payments due on 20th of every month.”