Kenya’s foreign exchange reserves fell by $30 million (Sh3.1 billion) in the week ended last Thursday, representing an 11-week low.
The reserves dropped to $7.08 billion (Sh731.65 billion), an equivalent of 4.7 months of import cover, Central Bank of Kenya’s latest data shows.
The reserves have come down from 5.07 months worth in mid-September. The reserves stood at $7,545 million or Sh755 billion.
The drop implied renewed demand for dollars possibly by corporates, government and/ or importers which outweighed inflows. Besides imports, the CBK uses the reserves to iron out adverse volatility on the shilling by selling the dollars.
The shilling has been under pressure for several months now as the country used dollars to purchase maize and standard gauge railway inputs. In the meanwhile the shilling opened trade at an average of 103.34 against the US dollar yesterday, largely unchanged from Friday’s 103.27 units.
“We anticipate the shilling, despite a relatively turbulent past week, to remain stable and withhold the expected end-month demand. We expect it may touch 103.00 levels in the coming week,” analysts at Genghis Capital said in an outlook report for this week.
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