Weekly Bulletin: The Stability Of The Shilling And Foreign Reserves

Exchange Rates

The Kenya Shilling remained stable against major international and regional currencies during the week ending March 9. It exchanged at 128.59 shillings per US dollar on March 9, compared to 127.29 shillings per US dollar on March.

Foreign Exchange Reserves

The usable foreign exchange reserves remained adequate at USD 6,566 million (3.67 months of import cover) as of March 9. This meets the CBK’s statutory requirement to endeavor to maintain at least 4 months of import cover.

Money Market

Liquidity in the money market increased during the week ending March 9, as government payments more than offset tax remittances. Commercial banks’ excess reserves stood at KSh 14.9 billion in relation to the 4.25 percent cash reserves requirement (CRR).

Open market operations remained active. The average interbank rate was 6.54 percent on March 9 compared to 6.76 percent on March 2.

During the week, the average number of interbank deals decreased to 28 from 29 in the previous week, while the average value traded decreased to 17.3 billion shillings from 23.5 billion shillings.

Government Securities Market

The Treasury bill auction of March 9, received bids totaling 35.6 billion shillings against an advertised amount of 24.0 billion shillings, representing a performance of 148.5 percent.

Interest rates remained stable, with 91-day, 182-day, and 364-day rates increasing marginally.

During the Treasury bond auction of March 8, the 17-year Infrastructure bond received bids totaling KSh 59.8 billion against an advertised amount of KSh 50 billion, representing a performance rate of 119.5 percent.

Equity Market

At the Nairobi Securities Exchange, the NASI, NSE 25 and NSE 20 share price indices declined by 6.0 percent, 4.0 percent, and 1.0 percent, respectively, during the week ending March 9.

Similarly, market capitalization declined by 6.0 percent, while equity turnover and total shares traded increased by 56.3 percent and 101.5 percent, respectively.

Bonds Market

Bond turnover in the domestic secondary market declined by 14.8 percent during the week ending March 9. In the international market, yields on Kenya’s Eurobonds increased by an average of 0.67 basis points, with 2024 maturity declining by 59.8 basis points.

The yields on the 10-Year Eurobonds for Ghana and Angola declined. Global Trends Concerns about inflation in major economies continue to moderate. Global equity markets gained during the week, amid lingering uncertainty about the pace of monetary policy tightening by major central banks.

The US dollar index strengthened by 0.75 percent against a basket of major currencies during the week ending March 9. International oil prices decreased during the week ending March 9, on account of the build-up of oil inventories.

Murban oil price decreased to USD 82.71 per barrel on March 9 from USD 83.66 per barrel on March 2.

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