Low Trade Hurts Kenya’s Forex Reserves –

CBK weekly bulletin for the week ending Thursday 30th April reveals that Kenya’s Foreign exchange reserves continued to diminish as receipts from tourism and international trade decreased.

The data shows that the usable Forex reserves declined to $7.744 billion (4.66 months of import cover) as at 30th April from $7.965 billion (4.84 months of import cover) a month ago. CBK had in early March stated that it will buy US dollars in order to progressively increase its foreign exchange reserves.

The lockdown rules in most parts of the world have reduced forex inflows into Kenya in the past month. Furthermore, horticulture and tea exports have been hammered by dwindling global demand leading to a decline in Kenya’s foreign exchange reserves. The current dollar stock is the lowest since March 2018 when reserves hit $7.15 billion.

READ ALSO: Kenya’s Central Bank to Buy Dollars From Commercial Banks

In the past week, the Monetary Policy Committee (MPC) lowered the Central Bank rate (CBR) to 7.00 percent from 7.25 percent.

The Kenyan shilling weakened against major international currencies exchanging at Ksh107.29 per US dollar on April 30 compared to Ksh107.14 per US Dollar on April 23.

Total public debt as of March 20, 2020, was KSh6.2 trillion comprising of KSh3.0 trillion domestic debt and KSh3.2 trillion external debt. The Treasury bills auction of April 30 received bids totaling KSh 17.9 billion against an advertised amount of KSh 24.0 billion, representing a subscription of 74.6 percent.

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