Central Bank of Kenya data shows that Kenyan banks’ foreign deposits dropped marginally to Sh577.9 billion in May compared to Sh578.9 billion in April and was nearly at the same level in March. Kenyan banks’ forex transition over the three-month period suggests that the deposits have stabilised after reaching Sh586.6 billion in January, Business Daily reported. There was a slight decline of 0.2 percent during the period between April and May.
The Monetary Policy Committee in its May report noted that Kenyan banks’ forex deposits stabilised at Sh577.9 bn as of June end showing ‘resilient performance of exports’, especially in horticulture and coffee. It further observed that the gap between imports and exports had reduced, implying that the banks had more forex deposits left with them.
Standard Investment Bank research analyst Eric Musau, said, “We have had a lot of inflows. I don’t know the relative strength of the factors leading to this, but they included diaspora remittances, new investments in Kenya and flows from exports such as in agriculture and horticulture.”
In May end, remittances stood at Sh243.2 billion and reached Sh295.3 billion at the end of June.
The country’s foreign exchange reserves rose by $742 million after it received a loan from the World Bank. In May, the World Bank approved a loan of $750 million for budget support which was released last week.
The central bank in its weekly bulletin said that the usable foreign exchange reserves was at $9.765 billion, covering 6.2 months of import. “This meets the CBK’s statutory requirement to endeavor to maintain at least 4 months of import cover,” it said.