Forex Reserves Fall Amid Debt Repayment Pressure

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Kenya’s official foreign reserves have fallen to Sh941.5 billion ($7.953 billion) in the week ended July 14; with the import cover dropping to the lowest level in a year at 4.59 months.

The reserves have declined by Sh102.3 billion from the week ended December 30; when they were recorded at Sh1.04 trillion ($8.817 billion) representing 5.39 months’ import cover.

Analysts have attributed the drop to external debt repayments; which remain the biggest source of outflows, including Eurobond coupon repayment made in June. External debt service in May and June were Sh29.6 billion; and Sh31.1 billion respectively according to World Bank Debtor Reporting System.

The Central Bank of Kenya (CBK) said in a bulletin that the reserves were adequate and above its threshold of at least four months of import cover; and the EAC region’s convergence criteria of 4.5 months.


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