Foreign Exchange Reserves

The usable foreign exchange reserves stood at USD 7,357 million (4.02 months of import cover). This meets CBK’s statutory requirement to endeavor to maintain at least 4.0-months of import cover but still falls short of EAC region’s convergence criteria of 4.5-months of import cover.


The Kenyan Shilling depreciated against the Dollar, the Sterling Pound and the Euro to exchange at KES 143.58, KES 183.25 and KES 158.31 respectively. The observed depreciation against the Dollar is attributed to a high demand for the currency, which has caused a market shortage.

CurrencyYTD ChangeW-o-W Change
Sterling Pound23.21%1.10%


Liquidity in the money markets increased, with the average interbank rate decreasing from 17.07% to 9.05%, as government payments more than offset tax remittances. Open market operations remained active.

LiquidityWeek (previous)Week (ending)
Interbank rate17.07%9.05%
Interbank volume (billion)30.5524.50
Commercial banks’ excess reserves (billion)4.7014.60

Fixed Income


T-Bills were over-subscribed during the week, with the overall subscription rate recorded as 199.73%, up from 47.08% performance recorded in the previous week. The 91-day T-Bill received the highest subscription rate at 1,044.60% while the 182-day T-Bill and 364-day T-Bill had a subscription rate of 52.50% and 9.0% respectively. The acceptance rate increased by 9.09% to close the week at 99.75%.


In the secondary bond market, there was a higher demand for the week’s bond offers. Bond turnover increased by 51.16% from KES 9.68 billion in the previous week to KES 14.63 billion. Total bond deals increased by 106.45% from 279 in the previous week to 576.

In the primary bond market, CBK issued a new two-year bond, FXD1/2023/2 and reopened the FXD1/2023/5 bond, both seeking KES 40.0 billion. The new bond’s coupon rate will be market determined whereas the reopened bond’s coupon rate is 16.84%. The sale runs from 31/07/2023 to 16/08/2023.


In the international market, yields on Kenya’s Eurobonds decreased by an average 0.30% compared to the previous week, increased by 0.22% month to date and 0.35% year to date. The yield on the 10-Year Eurobonds for Ghana and that of Angola declined. Below is a summary analysis of performance for individual bonds.

BondYTD ChangeM-o-M ChangeW-o-W Change
2014 10-Year Issue0.26%0.68%-0.35%
2018 10-Year Issue0.56%0.22%-0.30%
2018 30-Year Issue0.04%0.06%-0.22%
2019 7-Year Issue0.37%-0.01%-0.50%
2019 12-Year Issue0.21%0.20%-0.19%
2021 13-Year Issue0.66%0.18%-0.22%

NASI, NSE 20 and NSE 25 settled 2.04%, 0.01% and 1.79% lower compared to the previous week bringing the year to date performance to -18.33%, -4.86% and -13.67% respectively. Market capitalization lost 2.05% from the previous week to close at KES 1.62 trillion recording a year to date decline of 18.38%. The performance was driven by losses recorded by large-cap stocks such asNCBA, Safaricom and EABL of 5.88%, 4.46% and 3.50% respectively.

The Banking sector had shares worth KES 955.4M transacted which accounted for 76.73% of the week’s traded value, Manufacturing & Allied sector had shares worth KES 19.7M transacted which represented 1.59% and Safaricom, with shares worth KES 11.7M transacted represented 15.36% of the week’s traded value.

Top Gainers and Losers in the Equities Markets

Top GainersYTD ChangeW-o-W
BK Group20.00%16.13%
Car & General-30.82%9.71%
LosersYTD ChangeW-o-W
E.A Portland-4.41%-11.20%

Alternative Investments

LosersWeek (previous)Week (ending)% Change
Derivatives Turnover (million)0.441.13156.13%
Derivatives Contracts111972.73%
I-REIT Turnover (million)0.840.39-54.11%
I-REIT deals5247-9.62%

Global and Regional Markets

Global MarketsYTD ChangeW-o-W
S&P 50016.73%-0.31%
Dow Jones Industrial Average (DJI)6.48%0.61%
FTSE 100 (FTSE)-0.40%-0.53%
STOXX Europe 6005.76%-0.02%
Shanghai Composite (SSEC)2.33%-3.01%
MSCI Emerging Markets Index3.65%-1.99%
MSCI World Index14.30%-0.46%
Continental MarketsYTD ChangeW-o-W
FTSE ASEA Pan African Index-3.91%-0.46%
JSE All Share4.50%-0.24%
NSE All Share (NGSE)26.61%0.20%
DSEI (Tanzania)-5.35%-0.67%
ALSIUG (Uganda)-16.87%2.59%

US stock market was volatile during the week, as a higher-than-expected rise in the producer price index dampened investors’ previous optimism that the Fed was unlikely to resume interest rate hikes later this year, exerting upward pressure on Treasury yields.

European stocks closed the week in the red zone, as investors remained concerned about the prospect of slower global economic growth and the potential for further interest rate hikes from the European Central Bank.

Asia Pacific indices edged lower during the week, primarily driven by Chinese shares leading the downturn due to ongoing worries about the property market. Furthermore, the data indicating an upsurge in US inflation contributed to the negative sentiment.

On the global commodities markets, Crude Oil WTI and ICE Brent Crude closed the week 0.45% and 0.66% higher at $83.19 and $86.81 respectively. Gold futures prices settled 1.49% lower at $1,946.60.

Week’s Highlights

  • The Monetary Policy Committee (MPC) of the Central Bank of Kenya met on 9th August 2023 and decided to retain the lending rate at 10.50%, noting that the impact of the June 2023 tightening of monetary policy to anchor inflationary expectations was still working its way through the economy, as evidenced by the decline in overall inflation to within CBK’s target range of 2.5%-7.5% in July. The MPC expects a further decline in inflation as food prices continue to fall.
  • The Monetary Policy Committee (MPC) also approved key measures aimed at improving the monetary policy implementation framework and enhancing the transmission of monetary policy. These measures are in line with the reforms outlined in the White Paper on Modernisation of the Monetary Policy Framework and Operations. One of the key measures approved by the MPC is the introduction of an interbank interest rate corridor around the Central Bank Rate (CBR) set at CBR ± 2.5%. This framework allows CBK to conduct its open market operations on a flexible rate fixed quantity basis. The MPC also approved changes to the terms and conditions for the facility, including reducing interest rate on the facility from 600 bps above the CBR to 400 bps above the CBR, improving access to the CBK Discount (Overnight) Window facility.
  • The British economy surged by 0.5% month-on-month in June 2023, exceeding expectations of a 0.2% growth and recovering from a 0.1% decline in May, attributed to an extra holiday. This is the fastest growth rate since October, driven by a significant 1.8% rise in production, led by a notable 2.4% expansion in manufacturing. Construction also rebounded strongly with a 1.6% gain and services went up 0.2%, reversing May’s stagnant performance, particularly boosted by a 0.5% rise in consumer-facing services. Notably, this is the first month since October 2022 where all three sectors contributed positively to the monthly GDP. The monthly GDP estimate now stands at 0.8% above pre-COVID levels.
  • The British economy expanded by 0.2% in Q2 2023, surpassing expectations of no growth, after a 0.1% increase in Q1. Services grew by 0.1%, driven by activities such as film production, computer programming and food services, and supported by favorable weather and live events. The production sector, which includes a 1.6% gain in manufacturing, contributed to a 0.7% increase. Construction went up 0.3%, while mining dropped 4.3% due to declines in crude petroleum and natural gas extraction. Household consumption edged 0.7% higher, propelled by transport, recreation and gas expenses, while government consumption surged 3.1%. However, gross fixed capital formation remained stagnant, as business investment growth was countered by a decline in government investment. Exports declined by 2.5%, while imports rose by 1%.
  • The US annual inflation rate rose to 3.2% in July from 3.0% in June, breaking a 12-month downward trend, attributed to base effects. Energy costs fell 12.5%, less than June’s 16.7% drop, with fuel, gasoline and utility gas declining at a smaller pace while the cost of apparel and transportation services saw a slight increase. Electricity prices rose 3%, lower than June’s 5.4%. Inflation slowed for food, shelter and new vehicles. The cost of medical services was also down 1.5%. Core inflation, which excludes food and energy, eased to 4.7% from 4.8% in June, below expectations of 4.8%.
  • China’s inflation rate experienced a 0.3% year-on-year (YoY) decline in July, marking the first drop since February 2021, in contrast to June’s unchanged figure and expectations of a 0.4% decrease. Food prices went down by 1.7%, owing to a substantial drop in pork prices following a 15-month rise. Non-food prices remained stable after a previous 0.6% drop the previous month, while apparel, housing, health and education costs grew. Transport costs, on the other hand, continued to fall. Core inflation, excluding food and energy, surged by 0.8% YoY, the highest increase since January, after rising by 0.4% in June. Monthly inflation unexpectedly rose by 0.2%, surpassing expectations of a 0.1% decline and marking the first upward movement in 6 months.

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