Kenya’s forex reserves fall to 5-year low

Nairobi, Kenya | Xinhua | Kenya’s foreign exchange reserves declined by 12.5 billion shillings (about 103 million U.S. dollars) this week to hit a five-year low as the shilling fell to the lowest level in history against the dollar, the Central Bank of Kenya said in its weekly update of the financial markets.

The reserves fell from 7.42 billion dollars last week to 7.32 billion dollars, with the apex bank reported to have sold an unspecified amount of dollars to stabilize the local currency.

During the week, the shilling fell to an all-time low of 120.82 against the dollar, the Central Bank said in its update released Friday evening.

The Kenyan currency has declined 7 percent against the dollar year-to-date.

Despite the decline, the Central Bank, however, said that “the usable foreign exchange reserves remain adequate” to cushion the shilling and cover importers’ demands.

The 7.321 billion dollars reserves, which are at 4.13 months of import cover, however, are in breach of the East African region’s forex reserves policy, where member states are required to maintain 4.5 months of import cover. ■