Kenya's foreign exchange reserves have declined sharply, according to data from the Central Bank of Kenya. The country's import cover slipped to 5.9 months from 6.1 months, continuing a four-week downward trend. This decline is attributed to a KSh 25 billion drop in reserves, which fell from USD 14,930 million to USD 14,736 million between October 1 and October 8, 2026.
The Central Bank of Kenya reported that the country's foreign exchange reserves stood at USD 14,736 million, approximately KSh 1.915 trillion, as of October 8. This represents a decline from USD 14,930 million, or KSh 1.94 trillion, recorded on October 1. The import cover correspondingly dropped from 6.1 months to 5.9 months over the same period.
This decline in reserves is not an isolated incident, but rather part of a four-week downward trend. On September 10, reserves stood at USD 15,253 million, providing 6.3 months of import cover. By October 8, the cumulative loss had reached approximately USD 517 million, or KSh 67.2 billion. The steepest single-week drop occurred in the most recent reporting period.
Despite the sustained decline, the Central Bank of Kenya described the reserve position as "adequate," noting that 5.9 months of import cover remains well above the statutory floor of four months. The Kenyan shilling held relatively steady during the period, trading at KSh 129.94 per dollar on October 8 compared to KSh 129.71 on October 1.
Several factors appear to be weighing on Kenya's external buffers. Global oil prices surging above USD 100 per barrel have amplified demand for US dollars among energy importers. As a net oil importer, Kenya is particularly exposed to this dynamic. External debt servicing also continues to absorb a significant portion of government revenue.
A recent Moody's projection indicated that Kenya could spend approximately 35% of government revenue on interest payments alone by 2027. This underscores the scale of the country's debt obligations and the potential pressure on its foreign exchange reserves. The trajectory of the reserves will hinge on several variables in the coming weeks.
The performance of Kenya's key agricultural exports, such as tea, coffee, and horticultural products, as well as the continued availability of external financing from institutions such as the IMF and the World Bank, will influence the country's reserve position. The Central Bank of Kenya's bulletin noted that the shilling "remained stable against major international and regional currencies during the week ending October 8, 2026."
Key points
- Kenya's foreign exchange reserves have declined to 5.9 months of import cover.
- The decline is attributed to a KSh 25 billion drop in reserves.
- Global oil prices and external debt servicing obligations are putting pressure on the reserves.
