TUKO.co.ke journalist Japhet Ruto brings over eight years of expertise in financial, business, and technology reporting, providing valuable insights into both Kenyan and global economic trends.

Kenya's foreign exchange reserves have increased by KSh 11 billion, delivering a substantial boost to the shilling's strength.

The Central Bank of Kenya (CBK) revealed forex reserves surged from $9,057 million (KSh 1.27 trillion) on Thursday, February 27 to $9,142 million (KSh 1.28 trillion) on Thursday, March 6.

This boost in reserves is anticipated to improve Kenya's capacity to handle external economic pressures while reinforcing the stability of the local currency amid global uncertainties.

The increase signals a healthy outlook for Kenya’s finances, likely bolstering investor trust and fostering a more promising economic climate.

"The usable foreign exchange reserves remained adequate at USD 9,142 million (4.7 months of import cover) as of March 6. This meets the CBK’s statutory requirement to endeavour to maintain at least four months of import cover," CBK disclosed in its weekly bulletin highlighting monetary and financial developments.

During the period under review, the regulator indicated the Kenyan shilling was steady against the main regional and international currencies.

The shilling appreciated marginally from 129.31 per unit against the US dollar on Thursday, February 27 to 129.23 on Thursday, March 6.

"The Kenya shilling remained stable against major international and regional currencies during the week ending March 6. It exchanged at KSh 129.23 per US dollar on March 6, compared to KSh 129.31 per US dollar on February 27," CBK stated.

After the CBK intervened, the value of the Kenyan shilling rose to a six-month high versus the US dollar.

Last week, traders who increased their demand for the dollar at the end of February placed fewer orders when the regulator sold dollars.

The local currency was priced at KSh 129.15 against the US dollar on Monday, March 3, the highest since August 29, 2024, when the shilling was trading at KSh 129.17.

The CBK's net sales of dollars reversed the apex bank's previous dollar purchases to manage volatility in the local currency because the economy saw a boom in dollar inflows, particularly from the recent infrastructure bond.

After a year of stability against regional and global currencies, the National Treasury explained the actual value of the shilling.

Treasury Principal Secretary (PS) Chris Kiptoo forecast that the shilling may soon trade at KSh 100 per US dollar.

Kiptoo noted that if the shilling remains stable, the CBK would stop buying dollars on the open market.

Source: TUKO.co.ke