Central Bank of Kenya Weekly Bulleting March 8

Exchange Rates

The Kenya Shilling remained  stable  against  major international and  regional  currencies  during  the  week ending March 7. It exchanged  at KSh 142.07 per US dollar on March 7, compared to  KSh 143.59 per  US dollar  on February 29 (Table 1).

Foreign Exchange Reserves

The usable foreign exchange reserves remained  adequate at USD 6,919 million (3.7 months  of import  cover) as of March 7. This meets  the  CBK’s statutory requirement to endeavor  to maintain  at least  4 months  of import  cover (Table 2).

Money Market

Liquidity in the money market remained  adequate during the  week  ending  March 7, supported by open  market operations.  Commercial  banks’  excess  reserves   stood at  KSh 20.0 billion in relation  to  the  4.25 percent  cash reserves  requirement (CRR). The average  interbank  rate was 13.49 percent  on March 7 compared to 14.06 percent on February 29. During the week, the average number  of interbank  deals decreased to 29 from 35 in the previous week, while the  average  value traded  decreased to KSh

17.8 billion from KSh 19.9 billion in the  previous  week

(Table 3).

Government Securities Market

The Treasury bills auction of March 7 received bids totaling

KSh  41.8 billion against  an  advertised   amount   of KSh

24.0 billion, representing a performance of 174.2 percent. Interest  rates  remained  stable,  with the 91-day, 182-day and 364-day rates increasing marginally  (Table 4).

During the  Treasury  bonds  auction  of March 6, the  re- opened   3-year  fixed rate  Treasury  bond  received  bids totaling  KSh 43.1 billion against  an  advertised  amount of KSh 40.0 billion, representing a performance of 107.7 percent (Table 5).

Equity Market

At the Nairobi Securities Exchange, the NASI, NSE 25 and NSE 20 share  price indices increased  by 2.1 percent,  1.4 percent   and  0.7 percent,   respectively,  during  the  week ending  March 7. However,  market  capitalization,   equity turnover and total shares traded  decreased by 2.1 percent,

48.6 percent and 37.2 percent, respectively (Table 6).

Bond Market

Bond turnover in the domestic secondary  market declined by 52.9 percent  during the week ending March 7 (Table 6). In the international market,  yields on Kenya’s Eurobonds declined.  Similarly, the yield on the 10-Year Eurobond  for Angola declined, while that of Zambia increased (Chart 3).

Global Trends

Concerns about inflation in advanced economies continued to ease  in the week ending March 7. Inflation in the Euro Area  declined  marginally to 2.8 percent  in January  2024 from 2.9 percent in December 2023. European Central Bank projects the Euro Area economic activity to remain subdued in the  near-term. Growth is projected  to increase  by 0.6 percent,  while inflation is expected  to fall to an average of

2.3 percent  in 2024. The US dollar index weakened  by 1.28 percent  against  a basket  of major  currencies  during  the week ending March 7.