NAIROBI, May 24 (Xinhua) — Kenya’s foreign exchange reserves shrank by a record 191 million U.S. dollars this week, falling below the 7 billion-dollar mark to stand at 6.98 billion dollars on Friday, the central bank said in its update on financial markets.
The Central Bank of Kenya (CBK), which has reportedly sold unspecified amount of dollars to bolster the local currency shilling, normally props up the currency in case it faces volatility to keep it at a desirable level so that the decline does not distort the financial markets.
Commercial banks noted that there was an increase in demand for dollars from manufacturers and importers, putting further pressure on the reserves.
Despite the decline, the central bank said the reserves remained adequate.
Kenya is expecting a 1 billion-dollar loan disbursement from the International Monetary Fund, which will boost the reserves.
