Kenya’s foreign exchange reserves remained strong at USD 14.047 billion as of July 2, providing six months of import cover and remaining well above the Central Bank of Kenya’s (CBK) statutory minimum requirement.
In its latest Weekly Bulletin released on Friday, July 3, CBK said the reserves continued to provide a sufficient buffer against external shocks, exceeding the legal requirement to maintain at least four months of import cover.
“The foreign exchange reserves remained adequate at USD 14,047 million (6 months of import cover) as of July 2. This meets CBK’s statutory requirement to endeavour to maintain at least 4 months of import cover,” read part of the report.
The latest figures mark an increase from June 26, when Kenya’s foreign exchange reserves stood at USD 13.173 billion, equivalent to 5.6 months of import cover.
CBK on Easing of Inflation
The report also showed that inflation eased to 6.4 percent in June, down from 6.7 percent in May, on the back of lower global oil prices and a slowdown in domestic food price increases.
Core inflation declined marginally to 3.1 percent from 3.2 percent, driven by lower prices of selected processed food items, while non-core inflation fell to 15.1 percent from 16.0 percent, supported by easing energy, transport and food costs.
Meanwhile, the Kenya shilling remained stable against major international and regional currencies during the week ending July 2, exchanging at KSh129.30 against the US dollar compared to KSh129.63 a week earlier.
Also Read: Kenya’s Foreign Exchange Reserves Fall to US$13.65 Billion
Against other major currencies:
- Euro – KSh147.98
- South African Rand – KSh7.97
- Japanese Yen (100 units) – KSh80.19
Against regional currencies, the shilling exchanged at:
- Ugandan Shilling – 28.32, Tanzanian Shilling – 20.35, Rwandan Franc – 11.31
Also Read: CBK Opens Govt Securities Market to Foreign Investors: How It Will Work
Money Market and NSE
The money market also remained liquid during the review period, with commercial banks holding KSh32.8 billion in excess reserves above the required cash reserve ratio, according to the CBK.
Demand for government securities remained strong, with the July 2 Treasury bill auction attracting KSh35.2 billion in bids against the advertised KSh24 billion, representing a subscription rate of 146.6 percent.
Interest rates on the 91-day, 182-day and 364-day Treasury bills rose marginally.
At the Nairobi Securities Exchange (NSE), share price indices closed the week higher, with the NASI, NSE 25 and NSE 20 gaining 3.08 percent, 3.38 percent and 2.69 percent, respectively.
Market capitalization, equity turnover and the number of shares traded also increased.
In the bond market, however, turnover in the domestic secondary market declined by 22.66 percent, while yields on Kenya’s Eurobonds rose by an average of 20.89 basis points.
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