CBK Forex Reserves Down Ksh.9.8 Billion In Shilling Slump

 By Kepha Muiruri For Citizen Digital

Central Bank of Kenya (CBK) usable foreign exchange reserves slumped by Ksh.9.8 billion ($87 million) last week as the shilling hit a new Ksh.113 low mark.

This is as the reserve bank open market operations remained active including the sale of dollars in the open market.

Subsequently, the largely dollar-denominated FX stock has reduced to an equivalent of 5.28 months of import cover compared to 5.34 months in the preceding week.

The reserves now stand at Ksh.976.7 billion ($8.643 billion) having fallen from Ksh.1.003 trillion ($8.873 billion) in mid-November.

CBK’s sale of dollars in the open market is largely viewed as a move to match up to increased demand for the green buck especially among traders following the steep rise in import costs over recent months.

The local unit has been projected to come under more pressure as the year winds up from the heavy dollar demand.

Even so, the store of FX at the CBK is expected to receive a timely boost from the wiring of Ksh.29.1 billion ($258.1 million) in upcoming days by the International Monetary Fund (IMF).

The sum represents the third disbursement of a larger Ksh.264.4 billion ($2.34 billion) loan.

The shilling was quoted at Ksh.113.03 against the US dollar during most of Monday’s trading session.