Kenya’s foreign-exchange reserves plunged the most in at least 13 years in the three months through March as rising costs for imports drained dollars from the central bank.
(Bloomberg) — Kenya’s foreign-exchange reserves plunged the most in at least 13 years in the three months through March as rising costs for imports drained dollars from the central bank.
The East African nation’s reserves dropped 13.6%, on a quarterly basis, to $6.43 billion at the end of March, according to the central bank’s data. That’s sufficient for 3.59 months of imports, compared with a requirement to maintain at least four months of coverage. The reserves dropped to the lowest since September 2015, according to data compiled by Bloomberg.
The move by the Organization of Petroleum Exporting Countries and allies including Russia to cut production by more than 1 million barrels a day from next month may raise costs for net-oil-importer Kenya and accelerate its currency’s decline. The shilling dropped 4.4% in March, the worst monthly drop since September, 2011.
Kenya got most of its foreign currency last year from diaspora remittances totaling about $4.03 billion, followed by $2.02 billion from tourism receipts, $1.04 billion from tea shipments and $907.3 million from horticulture exports. The nation spends approximately $500 million monthly on petroleum products, one of its biggest imports.
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