- Kenya's foreign exchange reserves declined sharply in the week ending October 8, 2026, according to Central Bank of Kenya data
- The country's import cover slipped to 5.9 months from 6.1 months, continuing a four-week downward trend
- Rising global oil prices and external debt servicing obligations are among the key factors putting pressure on the reserves
Elijah Ntongai is an experienced editor at TUKO.co.ke, with more than four years in financial, business, labour and technology research and reporting. His work provides valuable insights into Kenyan, African, and global trends.
Kenya's foreign exchange reserves fell by approximately KSh 25 billion in the week ending October 8, 2026, pushing the country's import cover to its lowest level in a month, the Central Bank of Kenya (CBK) has reported.
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CBK data shows reserves stood at USD 14,736 million (approximately KSh 1.915 trillion) as of October 8, down from USD 14,930 million (KSh 1.94 trillion) recorded on October 1.
Import cover correspondingly dropped from 6.1 months to 5.9 months over the same period.
Four weeks of consecutive decline
The weekly bulletin reveals that the erosion has been ongoing since mid-September. Reserves stood at USD 15,253 million (KSh 1.982 trillion) on September 10, providing 6.3 months of import cover.
By October 8, the cumulative loss had reached approximately USD 517 million (KSh 67.2 billion), with the steepest single-week drop occurring in the most recent reporting period.
Despite the sustained decline, the CBK 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.
The CBK noted in its bulletin that the shilling "remained stable against major international and regional currencies during the week ending October 8, 2026."
What is driving the reserve drawdown
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, who require hard currency to settle petroleum import bills.
Kenya, as a net oil importer, 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, underscoring the scale of the country's debt obligations.
The trajectory of the reserves will hinge on several variables in the coming weeks, including the direction of global oil prices, the performance of Kenya's key agricultural exports such as tea, coffee, and horticultural products, and the continued availability of external financing from institutions such as the IMF and the World Bank.
Source: TUKO.co.ke