Foreign Exchange Reserves

The usable foreign exchange reserves stood at USD 7,481 million (4.09 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 141.38, KES 185.06 and KES 158.08 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 Pound24.43%2.95%


Liquidity in the money markets increased, with the average interbank rate decreasing from 9.34% to 8.60%, as government payments more than offset tax remittances. Remittance inflows totaled $345.86 million in June 2023, a 1.77% decline from $352.11 million in May 2023 and a 6.07% rise from $326.06 million in June 2022. Open market operations remained active.

LiquidityWeek (previous)Week (ending)
Interbank rate9.34%8.60%
Interbank volume (billion)11.5728.70
Commercial banks’ excess reserves (billion)37.4028.30

Fixed Income


T-Bills remained over-subscribed during the week, with the overall subscription rate recorded as 151.85%, up from 125.49% performance recorded in the previous week. The 91-day T-Bill received the highest subscription rate at 833.06% while the 182-day T-Bill and 364-day T-Bill had a subscription rate of 13.47% and 17.74% respectively. The acceptance rate decreased by 0.06% to close the week at 99.84%.


In the secondary bond market, there was a higher demand for the week’s bond offers. Bond turnover increased by 5.44% from KES 12.17 billion in the previous week to KES 12.83 billion. Total bond deals decreased by 15.16% from 752 in the previous week to 638.

In the primary bond market, CBK released auction results for the newly issued FXD1/2023/5 and reopened FXD1/2016/10 which sought to raise KES 40.0 billion. The issues received bids worth KES 51.76 billion, representing a subscription rate of 129.41%. Of these, KES 38.57 billion worth of bids were accepted at a weighted average rate of 16.84% and 16.33% respectively.


In the international market, yields on Kenya’s Eurobonds on average remained unchanged compared to the previous week, increased by 0.42% month to date and 0.61% year to date. The yield on the 10- Year Eurobond for Ghana increased, while 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 Issue-0.11%0.29%0.27%
2018 10-Year Issue0.95%0.46%-0.06%
2018 30-Year Issue0.45%0.29%-0.06%
2019 7-Year Issue1.11%0.82%0.09%
2019 12-Year Issue0.57%0.37%-0.05%
2021 13-Year Issue0.95%0.54%0.06%

NASI, NSE 25 and NSE 20 settled 2.30%, 0.41% and 2.28% higher compared to the previous week bringing the year to date performance to -10.53%, -3.03% and -7.50% respectively. Market capitalization gained 2.30% from the previous week to close at KES 1.77 trillion recording a year to date decline of 10.56%. The performance was driven by the gains recorded by large-cap stocks such as Equity, KCB and EABL of 7.63%, 3.43% and 3.31% respectively.

The Banking sector had shares worth KES 493.3M transacted which accounted for 59.12% of the week’s traded value, Manufacturing & Allied sector had shares worth KES 17.0M transacted which represented 2.06% and Safaricom, with shares worth KES 271.6M transacted represented 32.54% of the week’s traded value.

Top Gainers and Losers in the Equities Markets

Top GainersYTD ChangeW-o-W
E.A Cables14.12%18.29%
TP Serene5.00%17.17%
LosersYTD ChangeW-o-W
HF Group43.49%-6.22%
Diamond Trust-4.41%-4.70%
Home Afrika0.00%-2.86%

Alternative Investments

Week (previous)Week (ending)% Change
Derivatives Turnover (million)0.250.86240.63%
Derivatives Contracts49125.00%
I-REIT Turnover (million)0.330.5361.77%
I-REIT deals526015.38%

Global and Regional Markets

Global MarketsYTD ChangeW-o-W
S&P 50017.82%2.42%
Dow Jones Industrial Average (DJI)4.15%2.30%
FTSE 100 (FTSE)-1.58%2.45%
STOXX Europe 6006.14%2.94%
Shanghai Composite (SSEC)3.89%1.29%
MSCI Emerging Markets Index6.85%4.88%
MSCI World Index16.03%3.21%
Continental MarketsYTD ChangeW-o-W
FTSE ASEA Pan African Index-4.97%-0.94%
JSE All Share6.03%4.27%
NSE All Share (NGSE)21.27%-0.75%
DSEI (Tanzania)-2.83%1.44%
ALSIUG (Uganda)-14.54%1.58%

US indices ended the week on a positive note, driven by robust second-quarter profits from major US banks, including JP Morgan Chase & Company, Wells Fargo & Company and Citigroup Inc. These banks benefited from the Federal Reserve’s tightening policies, resulting in increased interest income. Additionally, the recovery in equity markets contributed to growth in assets under management, further enhancing their financial performance.

European stock markets closed the week green, as cooling inflation in the US fueled optimism that the Federal Reserve would soon halt its aggressive rate-hiking cycle. This development raised hopes that the world’s largest economy, a significant driver of global growth, could avoid a recession, leading to increased “soft landing” sentiment among investors.

Asia Pacific indices posted modest gains this week, driven by robust performance in tech-heavy stocks amid indications of easing inflationary pressures in the US. However, Chinese stocks experienced limited growth as investors exercised caution in anticipation of crucial second-quarter gross domestic product (GDP) data from China.

On the global commodities markets, Crude Oil WTI and ICE Brent Crude closed the week 2.11% and 1.78% higher at $75.42 and $79.87 respectively. Gold futures prices settled 1.65% higher at $1,964.40.

Week’s Highlights

  • The Energy and Petroleum Regulatory Authority (EPRA) released its latest monthly statement on the maximum retail prices of petroleum products, effective from 15th July 2023 to 14th August 2023. Notably, super petrol and kerosene experienced a reduction in pump prices by KES 0.85 and KES 3.96 to KES 194.68 per litre and KES 169.48 per litre respectively. Diesel prices, however, remain unchanged at KES 179.67 per litre.
  • The Kenya Revenue Authority (KRA) has achieved consistent growth in revenue collection, with a notable 6.7% increase in the financial year 2022/2023. Over the past five years, revenue collection has steadily risen from KES 1.58 trillion in FY2018/2019 to KES 2.17 trillion in FY2022/23, reflecting a remarkable growth of 37% (KES 586.26 billion). Despite global fiscal challenges impacting the economy, KRA successfully collected KES 2.17 trillion from July 2022 to June 2023, surpassing the previous financial year’s collection of KES 2.03 trillion by KES 135 billion.
  • Kenya signed a state-backed agreement with three prominent Gulf oil companies, including Saudi Aramco, Emirates National Oil Corporation (Enoc) and Abu Dhabi National Oil Corporation Global Trading (Adnoc). The objective of this deal is to reduce the cost of fuel supplied on credit, ensuring that consumers benefit from the global decline in fuel prices. By postponing payments for six months and enabling local companies to pay in local currency, this arrangement aims to alleviate foreign exchange pressure and provide support to the struggling Shilling.
  • Kenya commenced discussions with potential investors in London as it prepares to issue a bond, aiming to secure the most favorable deal for its $2.0 billion Eurobond maturing in June 2024. The government is exploring various options, including full repayment with multi-tranche bonds, part buy-back and part repayment with multi-tranche Eurobonds and part swap part repayment with multi-tranche Eurobonds. Additionally, the government is considering the possibility of issuing a Sukuk bond, following Egypt’s example in issuing Shariah-compliant bonds on global markets. Another option under consideration is a Samurai bond, denominated in Japanese Yen and subject to Japanese regulations. The exploration of a Samurai bond reflects the government’s efforts to mitigate foreign exchange pressures, as the Shilling has shown relative stability against the Japanese Yen compared to other currencies like the US dollar and the British pound.
  • The IMF Executive Board is scheduled to convene next week to approve the extension of its significant credit arrangement with Kenya, encompassing the extended fund and extended credit facilities. Additionally, the board will assess a new 20-month arrangement request under the resilience and sustainability facility. This meeting will involve close monitoring of Kenya’s fiscal and monetary reforms, essential for continued support from the IMF. Previous discussions in December outlined crucial fiscal and monetary policy reforms that Kenya was expected to implement in line with the multi-year arrangement, which primarily relies on access to funding.
  • US inflation rate decelerated to 3.0% in June 2023, marking the lowest level since March 2021, and below both May’s 4.0% and market expectations of 3.1%. The slowdown can be attributed in part to a high base effect from the previous year, when surging energy and food prices drove the headline inflation rate to its highest level since 1981 at 9.1%. Notably, energy costs plunged 16.7%, with fuel oil, gasoline and utility gas service prices experiencing significant declines. Additionally, inflation eased for food, shelter, new vehicles, apparel and transportation services. Medical services costs dropped by 0.8% and prices of used cars and trucks declined by 5.2%. The core inflation rate, which excludes volatile food and energy prices, decreased to 4.8%, the lowest since October 2021.
  • China’s inflation unexpectedly stagnated in June 2023, falling short of market expectations and May’s modest increase of 0.2%. This marked the lowest reading since February 2021, primarily driven by a decline in non-food prices, particularly in the transportation sector, which experienced a sharper drop of -6.5% compared to -3.9% in May. Additionally, education costs moderated, while health prices remained stable at 1.1%. Housing prices showed no change after a 0.2% decline. In contrast, food prices rose the most in three months, mainly due to higher costs for fresh vegetables and eggs, despite a notable decrease in pork prices. Core inflation, excluding food and energy, increased by 0.4% year-on-year, the smallest gain since March 2021 following a 0.6% rise in May. Furthermore, monthly inflation unexpectedly dropped by 0.2%, marking the fifth consecutive month of declines, contrasting consensus expectations of a flat reading.
  • The Chinese economy surpassed expectations, recording a 0.8% seasonally adjusted growth in Q2 2023. However, this marked a significant slowdown from the previous quarter’s 2.2% expansion, indicating a loss of momentum in the recovery. The uneven recovery was attributed to ongoing challenges such as the property downturn, the risk of disinflation, high unemployment among young adults and declining exports. With these concerns, there is growing pressure on policymakers to implement fresh stimulus measures, including potential central bank interest rate cuts and further easing of property controls.
  • The British economy experienced a slight contraction of 0.1% in May 2023, following a 0.2% growth in April. This result was better than expected, as forecasts predicted a larger decline of 0.3%. Factors such as an additional bank holiday and strikes weighed on the economy, with production being the biggest under-performer, particularly in electricity, gas, steam and air conditioning supply which saw a 2% slump. Water supply, sewerage, manufacturing, construction and services also experienced declines or remained flat. Over the three months leading to May, the British economy displayed no growth. The Office for National Statistics (ONS) suggested that a better figure than a 0.1% decline for June’s GDP would indicate the economy’s avoidance of a contraction for Q2 as a whole. Currently, the GDP is estimated to be 0.2% higher than its pre-COVID levels.

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