The Central Bank of Kenya (CBK) has revealed that the prices of oil increased in the week ending October 24 while the Kenyan shilling remained stable against major currencies.
In its weekly report, CBK said the Kenya Shilling remained stable against major international and regional currencies.
CBK said the shilling exchanged at KSh129.20 per US dollar on October 24 same rate as of October 17.
However, the Bank said that international oil prices increased.
According to CBK, the hike partly reflects the geopolitical tensions in the Middle East.
“The price of Murban oil increased to USD 76.66 (Ksh10,718.68) on October 24, 2024, from USD 74.49 (Ksh10,415.27) on October 17, 2024,” reads part of the report.
According to IMF’s October update of the World Economic Outlook (WEO), global growth is expected to remain stable at 3.2 percent in 2024 and 2025, largely in line with the WEO update for July.
The 2024 growth forecast for the US was revised upwards to 2.8 percent from 2.6 percent, while the Euro area was revised downwards to 0.8 percent from 0.9 percent.
On the other hand, the downward revision for China, Mexico, Saudi Arabia and Sub-Saharan Africa was on account of disruptions to production and shipping of commodities, conflicts, civil unrest, and extreme weather events.
“The US dollar index strengthened by 0.23 percent against a basket of major currencies during the week ending October 24, 2024,” CBK said.
Foreign Exchange Reserves
The usable foreign exchange reserves remained adequate at USD 8,485 million (4.4 months of import cover) as of October 24.
This meets the CBK’s statutory requirement to endeavour to maintain at least 4 months of import cover.
CBK Remittances Inflow
Remittance inflows in September 2024 totalled USD 418.5 million (Ksh54.1 billion) compared to USD 340.4 million (Ksh40 billion) in September 2023, an increase of 22.9 percent.
Additionally, the cumulative inflows for the 12 months to September 2024 increased by 14.0 percent to USD 4,723 million compared to USD 4,142 million in a similar period in 2023.
CBK explained that the remittance inflows continue to support the current account and the foreign exchange market.
The US remains the largest source of remittances to Kenya, accounting for 55.4 percent in September 2024.
Also Read: CBK Explains How Kenyans Will Benefit in Sending and Receiving Money with Upcoming System
Money Market
Liquidity in the money market remained adequate during the week, supported by open-market operations.
Commercial banks’ excess reserves stood at Ksh17.8 billion in relation to the 4.25 percent cash reserves requirement (CRR).
The average interbank rate was 11.97 percent on October 24 compared to 11.93 percent on October 17.
During the week, the average number of interbank deals declined marginally to 51 from 52 in the previous week, while the average value traded increased to Ksh44.4 billion from Ksh41.4 billion in the previous week.
Government Securities Market
The Treasury bill auction of October 24 received bids totaling Ksh85.8 billion against an advertised amount of Ksh24.0 billion, representing a performance of 357.32 percent.
However, the interest rate on 91-day, 182-day, and 364-day Treasury bills declined.
Also Read: NCBA Bank Lowers Interest Rates After CBK Review
Bond Market
Further, the bond turnover in the domestic secondary market decreased by 39.6 percent during the week ending October 24.
In the international market, yields on Kenya’s Eurobonds on average increased by 25.2 basis points.
The yield on the 10-year Furobond for Angola decreased marginally while that of Zambia increased.
Equity Market
At the Nairobi Securities Exchange, NASI increased by 0.8 percent while the NSE 25 and NSE 20 share price indices decreased by 0.5 percent and 0.3 percent, respectively during the week ending October 24.
Over the same period, Market capitalization and equity turnover increased by 0.8 percent and 8.4 percent while total shares traded decreased by 14.3 percent.
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