Kenya's Forex Reserves Slide for Third Week, Exerting Mild Pressure on Shilling

Kenya's foreign exchange reserves have declined for the third consecutive week, falling to USD 15.155 billion (KSh 1.96 trillion) as of August 20, according to the Central Bank of Kenya's (CBK) weekly bulletin released on August 22.

This latest figure marks a gradual decrease from USD 15.245 billion recorded on August 13 and USD 15.248 billion on August 6, continuing a three-week downward trend. Despite this reduction, the CBK maintains that the reserves remain adequate, covering 6.3 months of imports and staying above the statutory minimum required to support the country's import needs.

Shilling Performance Against Key Currencies

The Kenyan shilling experienced slight depreciation against major global currencies during the week ending August 20. It traded at KSh 129.49 per US dollar, a marginal drop from KSh 129.40 the previous week.

• Against the British pound, the shilling weakened by 0.45%, moving from KSh 174.61 to KSh 175.39.
• It declined 0.41% against the euro, slipping from KSh 149.38 to KSh 149.99.
• The depreciation against the US dollar was minimal at 0.04%, shifting from KSh 129.37 to KSh 129.42.
• Conversely, the shilling strengthened by 0.39% against the Japanese yen.

Regional Currency Dynamics

Regionally, the shilling showed resilience by gaining modestly against neighboring East African currencies:

• 0.24% appreciation versus the Ugandan shilling
• 0.10% gain against the Tanzanian shilling
• 0.09% rise against the Rwandan franc
• The shilling remained steady against the Burundi franc.

Overall, the Kenyan shilling held firm within the East African region but faced slight pressure from major international currencies amid the dip in forex reserves.