Kenya's forex reserves decline by $254m due to external loan repayments

According to reports, Kenya's foreign exchange reserves have declined by KSh27.8 billion (about $254 million) since the start of March, pulled down by external loan repayments.

The forex reserves fell from $7.605 billion at the end of February to $7.351 billion on March 11, the Central Bank of Kenya (CBK) said in its weekly update on financial markets released on Friday.

Kenya's external debt now stands at $35 billion. According to Xinhua News Agency, one of the loan packages, whose interest payment was due in the past days, is the $2 billion Eurobond, which was borrowed in 2018.

But despite the decline, the apex bank noted that the reserves were adequate to meet the country's import bill and support the shilling if need arose. "The usable foreign exchange reserves remain adequate. This meets the CBK's statutory requirement to endeavour to maintain at least four months of import cover," the bank said.

Foreign Exchange reserves held by the Central Bank are a national asset held as a safeguard to ensure availability of foreign exchange to meet the country’s external obligations, including imports and external debt service.