CBK Reserves Ease to KSh1.915T, Still Cover 5.9 Months of Imports

The reserves covered 5.9 months of imports, compared with 6.1 months a week earlier. The Central Bank says it is required to endeavour to maintain at least four months of import cover, leaving the latest figure 1.9 months above that benchmark.

What changed?

The Central Bank of Kenya’s weekly bulletin for 9 October shows reserves falling from KSh1.940T ($14.930B) on 1 October to KSh1.915T ($14.736B) on 8 October. The figures are calculated at KSh129.94 to the US dollar, the exchange rate reported for 8 October. The underlying reserve totals are published in US dollars by the bank.

The decline follows several weeks of lower reported reserves. The bulletin records reserves of KSh1.981T ($15.253B) on 10 September, KSh1.959T ($15.088B) on 17 September and KSh1.953T ($15.042B) on 24 September, using the same 8 October conversion rate for comparison. These converted figures are illustrative comparisons, not the official daily valuation of the reserves in shillings.

What does cover measure?

Foreign-exchange reserves help a country meet external payment needs and give the central bank a buffer when foreign-currency inflows weaken or import bills rise. Import cover estimates how long those reserves could finance imports at the average rate used in the calculation. It is a useful measure of the buffer, not a promise that every currency or import-price movement will remain stable.

The latest 5.9-month cover remains above the four-month minimum cited by the Central Bank. That provides a cushion, although the decline means the cushion is smaller than it was a week earlier. The data alone do not establish why reserves fell, so it would be wrong to attribute the movement to a single payment or intervention without additional evidence.

The shilling traded at KSh129.94 per US dollar on 8 October, compared with KSh129.71 on 1 October, according to the same bulletin. That is a modest weakening over the period, but the weekly figures do not by themselves establish a longer-term currency trend.

What should readers watch?

Businesses that import fuel, machinery, medicines or other goods watch the exchange rate because it affects the shilling cost of foreign purchases. A stronger reserve buffer can support confidence in the country’s ability to meet external payments, but it cannot prevent global commodity prices from rising or guarantee that every importer’s costs will stay flat.

Investors and businesses should watch the Central Bank’s next weekly bulletin for whether reserves stabilise, continue falling or recover, and whether import cover moves closer to the statutory minimum. The reserve figures should be read alongside exchange-rate movements, export earnings, import demand and other balance-of-payments data rather than in isolation.

Mwenendo’s recent report on bank lending rates after the Central Bank’s rate hold provides related context on the wider monetary and financial picture.