CBK's foreign reserves hit four-year high after IMF boost
By Maureen Kinyanjui |
The rise in reserves is largely attributed to IMF debt inflows and CBK's strategic net purchases of dollars.
Kenya's official foreign reserves at the Central Bank of Kenya (CBK) have surged to their highest level in four years, bolstered by recent disbursements from the International Monetary Fund (IMF) and CBK's net dollar purchases.
According to CBK data, the reserves increased by Sh95 billion, reaching Sh1.204 trillion ($9.323 billion) as of last Thursday, up from Sh1.109 trillion ($8.586 billion) the previous week.
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This level marks the highest reserve position since early October 2021, when the cover was recorded at Sh1.210 trillion ($9.365 billion).
The rise in reserves is largely attributed to IMF debt inflows and CBK's strategic net purchases of dollars.
The CBK has taken advantage of increased foreign investment in government domestic debt, drawn by Kenya's double-digit interest rates, to boost its foreign currency reserves.
IMF loan
The IMF recently approved a disbursement of Sh78.3 billion ($606.1 million) to Kenya on October 30, 2024.
This sum, covering the seventh and eighth reviews of the IMF's multi-year structural reform programme for Kenya, has since been credited to CBK's accounts as foreign reserves.
The funds are available for on-lending to the government in local currency as needed.
In addition to IMF inflows, CBK's active purchase of dollars has helped strengthen the reserve buffer.
With the rise, Kenya's foreign reserves now meet the statutory requirement of maintaining at least four months of import cover, as well as the East African Community (EAC) convergence criteria of a 4.5-month import cover.
"The usable foreign exchange reserves remained adequate at 4.8 months of import cover as of November 7. This meets the CBK's statutory requirement to endeavour to maintain at least four months of import cover," CBK said last week.
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