Kenya's Forex Reserves Drop by KSh 56b as Public Debt Skyrockets
- The Central Bank of Kenya released its weekly bulletin, highlighting monetary and financial developments in the country
- The banking regulator revealed Kenya's high public debt following a borrowing spree by President William Ruto in the local and international markets
- However, the state corporation noted that the value of the Kenyan shilling remained stable against the US dollar
TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial, business, and technology reporting and offers deep insights into Kenyan and global economic trends.
Kenya's forex reserves have dropped by KSh 56 billion as mounting debt continues to pile pressure on the economy.
Source: Facebook
This was revealed by the Central Bank of Kenya's weekly bulletin highlighting monetary and financial developments in the country, published on Friday, July 25.
The banking regulator revealed that the value of forex reserves declined to $10,749 million (KSh 1.39 trillion) on Thursday, July 24, from $11,185 million (KSh 1.44 trillion) on Thursday, July 17.
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"The usable foreign exchange reserves remained adequate at $10,749 million (4.7 months of import cover) as of July 24. This meets the CBK’s statutory requirement to endeavour to maintain at least four months of import cover," it stated.
What is the value of the Kenyan shilling?
Despite the drop in the foreign exchange reserves, CBK noted that the Kenyan shilling remained stable against the United States (US) dollar.
The local currency exchanged at KSh 129.26 per US dollar on July 24, compared to KSh 129.24 per US dollar on July 17.
This came as commercial banks’ excess reserves stood at KSh 8.7 billion, while the average interbank rate dropped marginally to 9.62% from 9.64%.
"The average quantity of interbank transactions over the week remained stable at 17, down from 18 the week before, although the average value exchanged rose from KSh 12.4 billion to KSh 13.7 billion," it stated.
Source: Twitter
What is Kenya's debt?
The same report revealed that Kenya's public debt increased from $11,491.98 billion (KSh 11.49 trillion) in April 2025 to $11,511.72 billion (KSh 11.51 trillion) in May 2025.
During the review period, the country's external debt increased from $5,327.88 billion (KSh 5.33 trillion) to $5,308.18 billion (KSh 5.32 trillion).
Domestic debt rose from $6,164.10 billion (KSh 6.16 trillion) to $6,203.54 billion (KSh 6.2 trillion) over the same time.
The majority of government loans in the domestic market are obtained through banking institutions (45.12%), followed by parastatals (5.92%), insurance firms (7.24%), pension funds (28.82%), and other investors (12.90%).
What should you know about Kenya's debt?
- The Treasury estimated that the country's debt would have grown to KSh 13.2 trillion by the conclusion of Ruto's first term in 2027.
- Busia senator Okiya Omtatah claimed that Kenya had paid off its debts and demanded full accountability.
- In fiscal year 2025/2026, the government plans to borrow more than KSh 900 billion.
What did Mbadi say about Kenya's debt?
Kenya is auditing its debt, according to National Treasury Cabinet Secretary (CS) John Mbadi.
The CS assured taxpayers during the public discussion of the 2025/2026 budget that the results would be available to the public once the audit was finished.
Although some Kenyans have contested the numbers, Mbadi stated that if there are any discrepancies, the Treasury will furnish further information.
Source: TUKO.co.ke
