- Kenya’s official foreign currency reserves plunged by $621 million (Sh70 billion) in January-February this year.
- The Central Bank of Kenya reported that its hard currency reserves, shrunk from $8.817 billion (Sh1.001 trillion) at the beginning of January to $8.196 billion (Sh931.3 billion) on February 10.
Kenya’s official foreign currency reserves plunged by $621 million (Sh70 billion) in January-February this year. The Central Bank of Kenya reported that its hard currency reserves, shrunk from $8.817 billion (Sh1.001 trillion) at the beginning of January to $8.196 billion (Sh931.3 billion) on February 10.
The steep fall in foreign currency reserves is largely attributed to the repayments of loans from China for the construction of the standard gauge railway. According to the World Bank data, that Kenya’s external debt payments in January was $458.7 million (Sh52.1 billion) out of that, $388.6 million (Sh44.2 billion) was due to China in interest and principal repayments. China extended a loan of $5.08 billion (Sh577 billion) in 2014 and 2015 to fund the Mombasa-Naivasha SGR line. The loan repayments started from January 2020 after a five-year grace period. Repayments also went to Trade and Development Bank (TDB), and France.
CBK, funds are mainly deployed towards making external payments on behalf of the government, and in support of a depreciating shilling against fluctuations through dollar sales to the local market. The shilling has been losing value in the last six months. Part of the reserves might have been deployed to support its stability in January.
