Kenya’s foreign exchange reserves stood at $7.96 billion during the week ending 6 December 2018, representing 5.3 months of import cover.
Central Bank of Kenya says the falling reserves still fulfilled the requirement to maintain at least four months of cover “and the EAC region’s convergence criteria of 4.5 months of imports cover.”
Foreign Exchange Reserves are the foreign assets, made of gold or specific currency, held or controlled by the CBK. The reserves can also be special drawing rights and marketable securities denominated in foreign currencies like treasury bills, government bonds, corporate bonds and equities and foreign currency loans.
In Kenya the reserves averaged $4.51 billion from 1995 until 2018, reaching an all time high of $12.26 billion in July of 2018 buoyed by $2 billion Eurobond cash, and a record low of $853 million in November of 1995.
During the period under review, there were tight liquidity conditions in the money market. Commercial banks recorded a shortfall of Ksh8.5 billion in excess reserves in relation to the 5.25 percent cash reserves requirements (CRR).
The average interbank rate rose to 7.2 percent from 5.8 percent in the previous week. The average number of interbank deals decreased to 33, compared to 39 in the previous week, while the average interbank volumes traded decreased to Ksh13.1 billion compared to Ksh27.2 billion