CBK governor Patrick Njoroge during a past briefing. FILE PHOTO | NMG
Official foreign exchange reserves dipped to a four-month low in
the week to September 26, making it the first time that they fell below
$9 billion since the sale of the third Eurobond in May.
Data
from the Central Bank of Kenya (CBK) indicates that the reserves stood
at $8.985 billion or Sh931.7 billion, the lowest level since May 23 when
they stood at $7.981 billion.
The third Eurobond cash
was reflected in the CBK’s account just a week after May 23 when the
total reserves jumped to a new high of $10.06 billion when the regulator
bought the dollars from the Treasury. The Eurobond raised Sh210 billion
($2 billion) thereby helping increase the forex pile and stabilise the
local currency.
The latest decline in reserves
continues the trend seen in recent months. The fall started on July 18
when the figure stood at $9.747 billion after a rise in the preceding
week, and have continued every week to date.
The CBK
has lately been facing pressure to keep the currency stable, mopping
tens of billions of shillings from the market. Last week, the CBK went
into the market with a term auction deposit (TAD) offering 8.98 percent,
which is close to the maximum allowable level or the Central Bank Rate
of 9.00 percent.
Though the CBK uses its foreign
exchange reserves to buy local currency from the market or sell forex to
banks, it does not disclose when it makes such transactions. The CBK
also spends forex in repaying foreign debt, which stood at Sh3.02
trillion or 52 percent of total public debt as at the end of June this
year.
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