Kenya: Decline of FX reserves rattles importers

By Herald Aloo
Posted on Tuesday, 7 June 2022 12:05

Kenya Central Bank Governor Patrick Njoroge addresses a news conference at the Central Bank of Kenya headquarters in Nairobi
Kenya Central Bank Governor Patrick Njoroge addresses a news conference at the Central Bank of Kenya (CBK) headquarters in Nairobi, Kenya July 25, 2019. REUTERS/Stringer

The gradual decline of foreign exchange (FX) reserves in Kenya is fuelling the black market and causing additional financial pain for manufacturers and importers.

Kenya’s dollar stock has plunged by 15% to $8.17m as of 26 May, from $9.62m held in September 2021.

Although the CBK insists that the available dollar stock is enough to cover 4.86 months of imports, it is only marginally above the statutory requirement of at least 4 months, as well as the East African Community (EAC) region’s convergence criteria of 4.5 months import cover.

“There are sufficient dollar reserves which we are using for payment of services,” CBK Governor Patrick Njoroge tells The Africa Report.