Foreign exchange reserves hit record high last week - report

Central Bank of Kenya [Photo Courtesy]

Central Bank of Kenya held $8.309 billion in foreign exchange reserves at the end of last week, a record high for a weekly close, the central bank data showed.

The bank said in its weekly bulletin, seen by Reuters on Wednesday, that the reserves were enough to cover about five-and-half months worth of imports.

There was no immediate explanation for the high reserves, which are legally required to be at a minimum of four months worth of imports.

The bank has struggled to build up reserves in the past, due to low exports that are far outstripped by imports of items like petrol.

But the situation has been improving in recent years. The current account deficit narrowed 11.9 percent last year to 5.2 percent of GDP, the statistics office said earlier this month.

Unforeseen shocks

The overall balance of payments swung to a small surplus last year from a deficit in the previous year. The East African nation, which goes to the polls in August, also has a stand-by credit with the IMF of $1.5 billion, which it can tap in case of unforeseen shocks.

The shilling has been broadly stable this year, trading at 102.50-103.90 shillings per dollar, Reuters data showed.

The Kenyan shilling was stable against the dollar on Wednesday due to hard currency inflows from investors abroad buying government securities.

At 0740 GMT, commercial banks quoted the shilling at 103.00/10 per dollar, unchanged from Wednesday’s close.