Home ECONOMY Forex reserves remain stable as year nears end

Forex reserves remain stable as year nears end

by biasharadigest
Market News

Forex reserves remain stable as year nears end

forex bureau
A forex bureau in Nairobi. FILE PHOTO | NMG 

Central Bank of Kenya’s (CBK) usable foreign exchange reserves have remained stable as the year ends at $8,815 million (Sh895.63 billion) giving the shilling a much-need lift.

The forex reserves increased by Sh6.78 million compared to Sh888.85 billion in the previous recording by the regulator, representing 5.42 months of import cover and meeting the statutory requirement to maintain at least four months of import cover.

The East African Community convergence criteria require 4.5 months of import cover.

The CBK has maintained an average of 5.71 months of import cover since July 4, recording a high of Sh991.63 billion or 6.21 months of import cover during the period.

The stability in foreign currency assets combined with increasing diaspora remittances and reduced current account deficit could strengthen the exchange rate.

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On Tuesday, commercial banks quoted the shilling at an average of 101.62 against the dollar.

Reuters quoted the traders saying the shilling was stable against the dollar on support by inflows from tourism and diaspora remittances amid thin greenback demand from the energy sector.

Data shows the diaspora remittances have increased 4.19 percent in the 10 months to October to Sh236.35 billion from Sh226.83 billion last year.

The current account deficit also narrowed to 11.8 percent during the three months to June, standing at Sh107.6 billion, from Sh122.0 billion in 2018.

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