Funds from the International Monetary Fund (IMF) coupled with US dollar purchases have pushed the official foreign reserves at the Central Bank of Kenya to a four-year-high.
In the first week of November, the CBK reserves increased by Sh. 95 billion to Sh. 1.204 trillion. This was equivalent to USD9.323 billion. In the last week of October, the CBK reserves were at Sh. 1.109 trillion which was equivalent to USD8.586 billion.
“The usable foreign exchange reserves remained adequate at 4.8 months of import cover as of November 7. This meets the CBK’s statutory requirement to endeavour to maintain at least four months of import cover,” the CBK stated.
This means that the CBK reserves are now at the highs that were last witnessed in October 2021 when the foreign reserves at the Central Bank were at Sh. 1.210 trillion which was equivalent to USD9.365 billion.
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The high reserves mean that Kenya is now meeting the statutory requirement and the East African Community (EAC) convergence criteria of maintaining at least four months and 4.5 months of import cover.
The rise in the reserves has been largely attributed to disbursements from the International Monetary Fund and dollar purchases that have been done by the Central Bank. In turn, these have worked to help shore up the Kenya Shilling.
The local currency is currently trading at 129.2255 against the US dollar. Over the past six months, the shilling has settled around this rate, having recovered from an all-time low of 160 at the beginning of the year.
