Exchange Rates
The Kenya Shilling remained stable against major international and regional currencies during the week ending July 18. It exchanged at KSh 129.99 per US dollar on July 18, compared to KSh 128.98 per US dollar on July 11 (Table 1).
Foreign Exchange Reserves
The usable foreign exchange reserves remained adequate at USD 7,409 million (3.9 months of import cover) as of July 18. This meets the CBK’s statutory requirement to endeavour to maintain at least 4 months of import cover (Table 2).
Remittances
Remittance inflows in June 2024 totalled USD 371.6 million compared to USD 345.9 million in June 2023, an increase of 7.4 percent (Chart 1). The cumulative inflows for the 12 months to June remained steady at USD 4,535 million compared to USD 4,017 million in a similar period in
2023, an increase of 12.9 percent. The remittance inflows continue to support the current account and the foreign exchange market. The US remains the largest source of remittances to Kenya, accounting for 54 percent in June 2024.
Money Market
Liquidity in the money market remained adequate during the week ending July 18, supported by open market operations. Commercial banks’ excess reserves stood at KSh 41.1 billion in relation to the 4.25 percent cash reserves requirement (CRR). The average interbank rate was 13.14
percent on July 18 compared to 13.09 percent on July 11.
During the week, the average number of interbank deals increased to 56 from 47 in the previous week, while the average value traded increased to KSh 33.2 billion from KSh 29.6 billion in the previous week (Table 3).
Government Securities Market
The Treasury bills auction of July 18 received bids totalling KSh 21.0 billion against an advertised amount of KSh 24.0 billion, representing a performance of 87.4 percent.
Interest rates on the 91-day, 182-day, and 364-day Treasury bills remained stable (Table 4).
RECENT MONETARY AND FINANCIAL DEVELOPMENTS
During the Treasury bond auction of July 17, the reopened 10-year and 20-year fixed rate Treasury bonds received bids totalling KSh 14.7 billion against an advertised amount of KSh 30.0 billion, representing a performance of 48.9 percent (Table 5).
Equity Market
At the Nairobi Securities Exchange, the NASI and NSE 25 share price indices increased by 0.86 percent and 0.03 percent, respectively, while the NSE 20 share price index decreased by 0.7 percent during the week ending July 18. Market capitalization increased by 0.87 percent, while
equity turnover and total shares traded decreased by 27.85 percent and 7.89 percent, respectively (Table 6).
Bond Market
Bond turnover in the domestic secondary market increased by 3.03 percent during the week ending July 18 (Table 6).
In the international market, yields on Kenya’s Eurobonds increased by an average of 26.3 basis points. The yields on the 10- Year Eurobonds for Angola and Zambia also increased (Chart 3).
Global Trends
According to IMF’s July update of the World Economic Outlook (WEO), global growth for 2024 is projected at 3.2 percent which is in line with the April WEO forecast. The downward revision for the US was offset by an upward revision in the Euro area, China and India.
Inflation concerns in advanced economies continue to ease
UK headline inflation remained unchanged at 2.0 percent in May and June 2024. The US dollar index weakened by 0.26 percent against a basket of major currencies during the week ending July 18.
International oil prices increased during the week ending July 18, mainly due to concerns over reduced global oil supply by major oil exporters. Murban oil price remained fairly stable and stood at USD 84.45 on July 18 compared to USD 84.41 on July 11.
Source: Central Bank of Kenya