CBK Governor Patrick Njoroge [Photo: Business Daily]
The Central Bank of Kenya (CBK) says the country’s foreign reserves will recover with the help of inflows of over 700 million dollars from the World Bank and the International Monetary Fund (IMF) in the first half of 2023.
This is as CBK Governor Dr Patrick Njoroge says the Government will by June receive the loans from the two multilateral institutions.
He says the loans might reverse the shrinking stock of foreign currencies that hit 3.92 months of import cover last week, the lowest in 88 months.
The government will receive 400 million dollars from the World Bank and 300 million dollars from the IMF.
Njoroge says global shocks, including the effects of the Covid-19 pandemic, the Russia-Ukraine war and the hike in interest rates by Central Banks in advanced economies, hit emerging and frontier economies badly.
“And given, for instance, that we couldn’t go to the external markets—there were some borrowings that we needed, that the government needed to do to support its budget, but did not happen,” he said.
The government uses the forex reserves for repayment of external loans and importing critical goods such as drugs and fertilizer.
Forex reserves have also been negatively impacted by faster growth in imports than exports which play a critical role in stabilizing Kenya’s exchange rate.
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