Kenya’s Foreign Reserves Worth 798 Billion Shillings

By Soko Directory Team / Published March 29, 2017 | 8:25 am

The country’s official foreign reserves are now worth 798 billion Kenya shillings, which equivalent to 5.1 months of import cover and well above the preferred four months level.

In a week the reserves have increased to 804 million dollars which is equivalent to 82.6 billion Kenya shillings.

The Central Bank of Kenya said that Kenyan foreign currency reserves have increased to a five month on dollar inflows from the government external borrowing.

This indicates that the Treasury has drawn down foreign loans, which could either be the 800 million dollars syndicated loan from four international banks or a 500 million dollars facility from the African Export-Import Bank (Afreximbank).

The CBK has also not been called upon to spend dollars in currency support in the past two months, with the shilling appreciating by 1.3 per cent to the dollar since the end of January to exchange at a mean of 102.70 Tuesday.

CBK governor Patrick Njoroge said in a statement following Monday’s Monetary Policy Committee meeting that the CBK’s foreign exchange reserves currently stand at $7.76 billion (5.1 months of import cover) compared to 6.96 billion dollars (4.6 months of import cover) at the end of January 2017

He added that the increase is largely due to inflows of planned external loans of the government. These reserves, together with the precautionary arrangements with the International Monetary Fund (IMF), equivalent to $1.5 billion, continue to provide an adequate buffer against short-term shocks

Henry Rotich, the Treasury CS has announced that the government plans to borrow a total of 1.46 billion dollars (150 billion Kenya shillins) through syndicated loans to plug a budget deficit in the current fiscal year ending in June.

The current foreign exchange market has stabilized due to lower imports of petroleum products, machinery and transport equipment coupled with good inflows from horticulture, tourism, and diaspora remittances — thus narrowing the current account deficit.

A report on CBK’s data shows that diaspora inflows in the one year to February stood at 1.73 billion dollars (177.7 billion Kenya shillings) compared to 1.58 billion dollars (162.3 billion Kenya shillings) in 12 months to February 2016.

Written by Amina Martha.

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