Data from the CBK’s weekly bulletin has revealed the usable foreign exchange reserves are on track to hit the 1Trn mark. As per the week ending June 11, the Central Bank of Kenya(CBK) reports the foreign reserve at Sh991.59 billion ($9,302 million). The rise was an increase of Sh 4.37 billion from the week’s previous stand of Sh987.22 billion ($9,261 million).
The increasing foreign reserve sees analysts attribute the trend to the disbursement of loans and grants as foreign funds. According to Churchill Ogutu, head of research Genghis Capital, “This is partly due to the disbursement, including the African Development Bank loan in the order of Sh22.51 billion ($225 million) that helped in offsetting settlement of external debt obligations made.”
The disbursement has acted as a cushion for countries amid the adverse effect of the Coronavirus. This is especially the case with the pandemic leaving a subdued job market and loss of export income.
With this, the import cover also increases to new levels as per the data. According to the report, “This meets the CBK’s statutory requirement to endeavor to maintain at least four months of import cover, and the EAC region’s convergence criteria of 4.5 months of import cover.”