Kenya's Dollar Reserves Fall to KSh 1.3t as Shilling Registers Slight Pressure

• The Central Bank of Kenya (CBK) reported a significant decrease in the foreign currency reserves in the last week of July 2025
• CBK registered a multiple-billion-shilling drop in US dollar reserves from the amount reported in the first week of July 2025
• The Kenyan shilling slightly depreciated against the greenback and other major regional and international currencies

Wycliffe Musalia has over six years of experience in financial, business, technology, climate, and health reporting, providing deep insights into Kenyan and global economic trends. He currently works as a business editor at TUKO.co.ke.

Kenya's foreign currency reserves declined significantly in the last week of July 2025.

How much is the current dollar reserve in Kenya?

The Central Bank of Kenya (CBK) reported KSh 1.38 trillion in US dollar reserves for the period under review.

This represented a KSh 65.8 billion decline in foreign currency reserves from KSh 1.45 trillion worth of dollars reported in the first week of July 2025.

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However, CBK governor Kamau Thugge remained adamant that the reserves will support more than four months of import cover.

"The usable foreign exchange reserves remained adequate at USD 10,692 million (KSh 1.38 trillion), representing 4.7 months of import cover, as of July 31. This meets the CBK’s statutory requirement to endeavour to maintain at least 4 months of import cover," said Thugge in a weekly bulletin released on Friday, July 31.

In June 2025, President William Ruto applauded CBK for maintaining a strong foreign currency reserve.

Ruto said the move played a significant role in strengthening the Kenyan shilling and improving the economy.

"For the first time in over a year, our exchange rate is stable, and our inflation has been managed," the head of state said.

What's the value of the shilling?

However, the declining US dollar reserves have seen the Kenyan shilling register slight pressure during the same period under review.

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According to Trading Economics, the Kenyan Shilling has weakened 0.04% in the past month.

Data from CBK indicated that the shilling exchanged at KSh 129.24 per US dollar on July 31.

On Monday, August 4, the shilling exchanged at 129.23 per US dollar, KSh 171.6 per British Pound, and KSh 149.62 per Euro.

In the regional market, the shilling traded at KSh 27.7 per Uganda Shilling, KSh 19.69 per Tanzanian Shilling and KSh 7.16 per South African Rand.

Will Kenyan shilling fall below KSh 129 per dollar?

Speaking exclusively to TUKO.co.ke, market analyst at FXPesa Rufas Kamau explained that the supply of CBK's foreign currency reserves is still strong, supported by the World Bank and other lenders' disbursements.

Kamau noted that this gives the regulator a leeway to maintain the shilling at KSh 129 per US dollar in the next five months.

"The CBK still has a healthy supply of foreign currency reserves. With the IMF & World Bank scheduling further loan disbursements to Kenya, the CBK has the leeway to continue trading the KES at 129.5 at least for the 3rd and 4th quarters," said Kamau.

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How Kenyan shilling is performing in East Africa

Meanwhile, the shilling reported slight depreciation against the Tanzanian shilling in the last weeks of July.

The Kenyan shilling exchanged at 19.85 against the Tanzanian shilling on Thursday, July 31, compared to 20.15 on Thursday, July 24.

This saw it lose regional strengths, after dwarfing other local currencies for more than seven months.

Proofreading by Mercy Nyambura, copy editor at TUKO.co.ke.

Source: TUKO.co.ke