CBK Goes On A 4-Month Shopping Spree For US Dollars

The Central Bank of Kenya (CBK) has announced plans to start buying US Dollars from Kenyan commercial banks for a period of four months.

According to a statement from CBK, it hopes to buy 100 million US Dollars every month (an equivalent to at least 10 billion shillings every month) between the month of March and June to “increase foreign reserves.”

“The Central Bank of Kenya announces that it will commence buying of US Dollars in order to progressively increase its foreign exchange reserve above the normal levels. This would bolster CBK’s preparedness to deal with the heightened global volatilities and uncertainties,” said CBK.

The Central Bank of Kenya says the move to buy US Dollars has been informed by the developments around the world, including a significant drop in the global oil prices, opening up a window for a more formal dollar purchase. program.

“This would bolster CBK’s preparedness to deal with heightened global volatility and uncertainties,” William Nyagaka, Director Financial Markets Department said in a Banking Circular to all chief executives of commercial banks.

“These purchases will be conducted while ensuring that they do not introduce volatility and instabilities in the foreign exchange market,” the bank said.

In its weekly bulletin, the CBK disclosed that its usable foreign exchange reserves remained adequate at $8.409 billion (5.11 months of import cover) as of February 27.

“This meets the CBK’s statutory requirement to endeavor to maintain at least four months of import cover, and the EAC region’s convergence criteria of 4.5 months of import cover,” said CBK in the weekly bulletin.