Kenya’s forex reserves down ahead of Christmas

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Kenya’s foreign exchange reserves fell by 11.6 billion shillings (about 105 million U.S. dollars) this week as the shilling remained under pressure from international currencies amid surge in demand for greenback ahead of Christmas.

Central Bank of Kenya said in its weekly report on the financial markets on Saturday that the forex reserves fell from 7.95 billion dollars to 7.85 billion dollars.

The shilling during the week weakened against major international and regional currencies.

Against the dollar, the shilling fell to an average of 111.29, down from 110.17 in the previous week.

The central bank is reported to have sold an unspecified amount of dollars to bolster the shilling so that it does not fall to levels that destabilize the financial markets.

Analysts have attributed the decline of the shilling to high demand for dollars from importers ahead of Christmas, putting pressure on the local unit amid low exports.

The bank, however, said the forex reserves are adequate to cover imports for at least 4.8 months.