Forex reserves fall to 5.6 month cover

Kenya’s official forex reserves declined by Sh14.65 billion in three weeks, leaving the Central Bank of Kenya (CBK) with a lower import cover and the local unit weaker at above 101 units to the dollar.

According to the latest CBK data, the reserves stood at $8.507 billion (or Sh859.67 billion) as at September 20 having closed last month at $8.652 billion (or Sh874.3 billion). This amounted to a dollar decline of $145 million or Sh14.65 billion.

The import cover now stands at 5.6 months compared to 5.76 months just three weeks ago.

The drop came at a time the shilling has also weakened and foreigner investor exits from the stock market risen.

“The CBK foreign exchange reserves, which currently stand at $8.507 billion continue to provide adequate cover, and a buffer against short-term shocks in the foreign exchange market,” said the Monetary Policy Committee in a statement following its meeting on Tuesday.