(Bloomberg) -- Kenya’s foreign-exchange reserves rose to their highest level in three years as capital flows into the East African nation accelerated, helping to keep its currency stable amid a sell-off elsewhere in emerging markets.
Reserves held by the central bank rose 8.6% to $9.32 billion by Nov. 7, compared to a week earlier, sufficient to pay for 4.8 months of imports, more than the minimum four months that it aimed to maintain as a cushion against short-term shocks.
The holdings, which increased for a 10th straight week, were boosted by a $600 million disbursement from the International Monetary Fund.
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“There has been a concerted effort by the central bank to rebuild reserves, which are now up 40% year-to-date, even after the successful refinancing of the $2 billion 2024 eurobond” in June, according to a note by BancTrust Investment Bank Ltd.
Kenya’s Shilling
The East African nation’s currency has traded unchanged at 129 shillings per dollar for seven consecutive sessions through Nov. 13, whereas EM currencies have hit a three-month low on concerns that Donald Trump’s election victory will intensify trade protectionism, stoking inflation and limiting the US Federal Reserve’s ability to cut interest rates.
Other factors that have contributed to the increase in reserves include a surge in remittance flows, Kenya’s largest source of foreign-exchange, as well as increased appetite for local currency securities from foreign investors and rising exports, BancTrust said.
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