Kenya's forex reserves fall by Sh22.8 billion on loan payments, weaker shilling

Kenya's foreign exchange reserves have fallen by Sh22.8 billion (USD 212 million), a drop attributed to payment of interest on external debt and central bank bid to support the local currency amid rising import bill.

The reserves fell from USD8.838 billion to USD8.627 billion last week, according to latest data issued on Monday by the Central Bank of Kenya.

The apex bank, however, said the forex reserves remain adequate, meeting its statutory requirements to endeavor to maintain at least four months of import cover, as well as the East Africa Community convergence criteria of 4.5 months of import cover.

The CBK normally uses the reserves to bolster the shilling, which has been under pressure in the past few weeks, trading at a low of Sh108.50 to the dollar on Monday, down from Sh107.7 to the greenback in July.

Imports into Kenya have been rising as countries reopen their economies and economic activities pick up in the east African nation, putting a strain on the shilling.

Kenya's external debt now stands at USD36 billion, up from USD31 billion in January.