Quick answer
The CBK weekly bulletin of 23 August 2024 showed the shilling at KSh 129.08 per dollar, usable reserves at USD 7,404 million (3.8 months of import cover), the 91-day T-bill rate at 15.794%, and the NASI up 3.1% for the week.
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Kenya’s financial markets had a strong week to 22 August 2024, according to the Central Bank of Kenya’s weekly bulletin released on 23 August. The shilling held steady at about KSh 129 to the dollar, usable foreign exchange reserves rose to USD 7.4 billion, Treasury bill rates edged lower and shares at the Nairobi Securities Exchange (NSE) rallied by more than 3 percent.
Shilling stable at KSh 129
The shilling exchanged at KSh 129.08 per US dollar on 22 August, compared with KSh 129.20 on 15 August, the CBK said. Over the week it averaged KSh 129.07, against KSh 129.28 the week before. The shilling weakened slightly against the pound, which rose from KSh 165.93 to KSh 168.89, and against the euro, which moved from KSh 142.27 to KSh 143.83, as the dollar index fell 1.4 percent against major currencies.
| Currency | 15 Aug 2024 (KSh) | 22 Aug 2024 (KSh) |
|---|---|---|
| US dollar | 129.20 | 129.08 |
| Sterling pound | 165.93 | 168.89 |
| Euro | 142.27 | 143.83 |
| 100 Japanese yen | 87.82 | 88.92 |
Reserves rise to USD 7.4 billion
Usable foreign exchange reserves rose to USD 7,404 million on 22 August from USD 7,316 million a week earlier. That is equal to 3.8 months of import cover. The CBK described reserves as adequate, although the level remained just below its statutory aim of at least 4 months of import cover.
Interbank rate edges up, liquidity adequate
The average interbank rate rose to 12.94 percent on 22 August from 12.84 percent on 15 August. Liquidity stayed adequate, helped by open market operations, with commercial banks holding excess reserves of KSh 26.7 billion above the 4.25 percent cash reserve requirement. Activity in the interbank market slowed: the average number of daily deals fell to 35 from 55, and the average value traded fell to KSh 16.6 billion from KSh 28.3 billion.
T-bill auction undersubscribed as rates ease
The Treasury bill auction of 22 August received bids of KSh 19.2 billion against KSh 24.0 billion on offer, a performance of 79.9 percent. Rates on all three papers declined slightly from the previous week.
| Paper | Offered (KSh M) | Bids (KSh M) | Accepted (KSh M) | Average rate 15 Aug | Average rate 22 Aug |
|---|---|---|---|---|---|
| 91-day | 4,000 | 7,911.73 | 7,786.83 | 15.809% | 15.794% |
| 182-day | 10,000 | 5,760.01 | 3,840.00 | 16.708% | 16.669% |
| 364-day | 10,000 | 5,498.14 | 5,492.24 | 16.866% | 16.859% |
Investors again preferred the short 91-day paper, which was nearly twice subscribed, while the 182-day and 364-day papers fell short of their targets. To see what these rates mean for your money, try our 91-day T-bill calculator or read how to buy Treasury bills in Kenya.
NSE indices rally
At the NSE, the NASI rose 3.1 percent during the week, the NSE 25 gained 4.1 percent and the NSE 20 climbed 3.8 percent. The NASI closed at 105.13 on 22 August, up from 102.01 on 15 August, while the NSE 20 ended at 1,692.07. Market capitalisation rose 3.1 percent to about KSh 1,643 billion. Equity turnover jumped 86.7 percent and the number of shares traded rose 38.5 percent, even though the number of deals fell 2.0 percent.
Bond trading surges, Eurobond yields fall
Bond turnover in the domestic secondary market rose 324.4 percent to KSh 38.4 billion for the week. In the international market, yields on Kenya’s Eurobonds fell by an average of 30.3 basis points. The yield on the 2027 seven-year Eurobond dropped to 10.171 percent and the 2048 thirty-year paper to 10.892 percent. The CBK also noted that the 10-year Eurobond yield for Angola declined while Zambia’s rose.
Global backdrop
The bulletin said global inflation concerns had eased and expectations of a US Federal Reserve rate cut in September had risen. International oil prices fell on worries about weaker demand, particularly from China, with Murban crude dropping to USD 77.69 a barrel on 22 August from USD 84.15 on 15 August. Lower oil prices are good news for Kenya’s import bill and pump prices.
What it means for savers and borrowers
Treasury bill rates above 15 percent kept government paper and money market funds attractive for savers, while the easing trend hinted at lower rates ahead. A stable shilling and rising reserves reduced pressure on importers and on households paying dollar-linked costs.
For the latest weekly numbers, see our more recent coverage such as this CBK weekly bulletin update, and compare money market funds and Treasury bills.
Frequently asked questions
What was the shilling exchange rate on 22 August 2024?
The CBK put it at KSh 129.08 per US dollar.
How large were Kenya’s usable reserves in August 2024?
USD 7,404 million on 22 August 2024, equal to 3.8 months of import cover.
What was the 91-day T-bill rate on 22 August 2024?
The average rate was 15.794 percent, down from 15.809 percent a week earlier.
How did the NSE perform that week?
The NASI rose 3.1 percent, the NSE 25 rose 4.1 percent and the NSE 20 rose 3.8 percent.
Source: Central Bank of Kenya, Weekly Bulletin, 23 August 2024, including data from the Nairobi Securities Exchange and Thomson Reuters.
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