Foreign Exchange Reserves

The CBK’s usable foreign exchange reserves remained adequate at USD 7,316 million (4.13 months of import cover). This meets CBK’s statutory requirement to endeavor to maintain at least 4.0-months of import cover. However, it does not meet EAC region’s convergence criteria of 4.5-months of import cover.


The Kenyan Shilling depreciated against the Dollar, the Euro and the Sterling Pound to exchange at KES 121.14, KES 118.69 and KES 136.46 respectively. The observed depreciation against the Dollar is attributable to increased Dollar demand from energy and commodity importers.

YTD ChangeW-o-W Change
Sterling Pound-10.42%1.23%


Liquidity in the money markets decreased with the average interbank rate increasing from 4.7% to 5.2%, as tax remittances more than offset government payments. Open market operations remained active.

Week (previous)Week (ending)
Interbank rate4.7%5.2%
Interbank volume (billion)13.133.0
Commercial banks’ excess reserves (billion)23.631.3

Fixed Income


T-Bills were over-subscribed during the week with an increase in the overall subscription rate from 116.74% recorded in the previous week to 117.93%. The 91-day T-Bill received the highest subscription rate at 487.96% while the 182-day T-Bill and 364-day T-Bill had a subscription rate of 48.20% and 39.65% respectively. The acceptance rate declined by 17.61% to close the week at 79.44%.


In the secondary bond market, there was a lower demand for the week’s bond offers. Bonds turnover declined by 34.49% from 14.33B in the previous week to 9.39B. Total bond deals declined by 20.28% from 429 in the previous week to 342.

In the primary bond market, CBK released auction results for FXD1/2022/025 which sought to raise KES 20 billion. The 25-year paper was under subscribed, receiving bids worth KES 14.89 billion, out of which KES 13.67 billion was accepted at a weighted average rate of 14.19%. While CBK seems to have yielded to investors’ demands for higher rates, the under subscription still reflects the government’s difficulty in meeting its domestic borrowing target.


In the international market, yields on Kenya’s Eurobonds increased by an average 0.61% compared to the previous week, decreased 0.017% month to date and increased 8.744% year to date. The yields on the 10-year Eurobonds for Angola and Ghana also increased. Below is a summary analysis of performance for individual bonds.

BondYTD ChangeM-o-M ChangeW-o-W Change
2014 10-Year Issue12.93%-0.08%1.19%
2018 10-Year Issue8.96%-0.03%0.73%
2018 30-Year Issue5.67%-0.20%0.46%
2019 7-Year Issue10.19%0.12%0.60%
2019 12-Year Issue8.03%-0.04%0.68%
2021 12-Year Issue6.68%0.12%0.04%

NASI and NSE 25 declined by 1.23% and 0.55% respectively while NSE 20 gained by 0.26% compared to last week bringing the year to date performance to -23.22, -17.24% and -10.95% respectively. The market capitalization also declined by 1.23% from the previous week to close at 1.9 trillion recording a year to date decline of 23.20%. The performance was driven by losses recorded by large-cap stocks such as KCB and Safaricom of 5.80% and 2.35% respectively. These were however mitigated by gains recorded by ABSA and Equity of 4.04% and 2.83% respectively.

The Banking sector had shares worth KES 271M transacted which accounted for 43.25% of the week’s traded value, Manufacturing & Allied sector had shares worth KES 174M transacted which represented 27.62% and Safaricom, with shares worth KES 132M transacted represented 21.05% of the week’s traded value.

Top Gainers and Losers in the Equities Markets

Top GainersYTD ChangeW-o-W
Flame Tree4.00%13.04%
TP Serena-5.25%11.15%
Top LosersYTD ChangeW-o-W
Car & General4.12%-17.31%
Kapchorua Tea5.53%-10.83%

Alternative Investments

Week (previous)Week (ending)% Change
Derivatives Turnover (million)1.220.93-23.09%
Derivatives Contracts2817-39.29%
I-REIT Turnover0.121.10793.13%
I-REIT Deals2041105.00%

Global and Regional Markets

Global MarketsYTD ChangeW-o-W
S&P 500-21.76%4.74%
Dow Jones Industrial Average (DJI)-15.04%4.86%
FTSE 100 (FTSE)-7.13%1.62%
STOXX Europe 600-19.12%1.27%
Shanghai Composite (SSEC)-16.34%-1.08%
MSCI Emerging Markets-29.87%0.20%
MSCI World Index-24.03%3.61%
Continental MarketsYTD ChangeW-o-W
FTSE ASEA Pan African Index-27.20%0.11%
JSE All Share-11.84%2.16%
NSE All Share (NGSE)3.19%-6.67%
DSEI (Tanzania)-0.98%2.45%
ALSIUG (Uganda)-11.50%3.90%

US stocks recorded their best weekly gains since June following a Wall Street Journal report that indicated that the Federal Reserve will likely edge towards a smaller hike in December. This should release the pressure that equities have been exposed to this year with the central bank’s aggressive interest rate hike path.

European stocks closed on a week on week high, supported by commodity stocks, mining stocks which were 0.9% higher and energy stocks which rose 1.6%. However, markets remain under pressure with investors uncertain about where peak inflation and interest rates lie.

Asia Pacific stocks fell throughout the week, weighed down by technology-heavy indices after US unveiled plans to curb semi-conductor imports. Benchmark index, Shanghai Composite rose 0.13% on Friday after the People’s Bank of China held its prime lending rate at 3.65% on Thursday. This reinforced expectations of the government’s efforts to support the economy.

On the global commodities markets, Crude Oil WTI closed the week 0.65% lower, while ICE Brent Crude closed 2.04% higher. Gold futures prices increased by 0.45% to settle at $1,656.30.

Week’s Highlights

  1. The International Monetary Fund (IMF), in its latest regional economic outlook for Sub-Saharan Africa, projected that Kenya’s forex reserves are set to fall to 3.9 months of import cover by the end of this year, below CBK’s statutory requirement of at least 4 months. The forecast will only aggravate the country’s existing dollar shortage and weakening shilling. IMF further indicated that the reserves will improve to 4.2 months of import cover in 2023.
  1. Data from the Insurance Regulatory Authority indicated that the total industry exposure to capital market investments (quoted shares) continued its downward trajectory from 5.8% in Q2’2019, 4.0% in Q2’2021 to 2.8% in Q2’2022. The report indicates that the industry held KES 25.26 billion worth of quoted securities as at June 2022, a 23.8% decline from KES 33.16 billion in 2021. This follows sustained sale of under performing assets whose value has dwindled with the bear market experienced at the stock exchange.
  1. The International Finance Corporation released its annual report for the year ended June 2022, which indicated that the institutional investor has invested an additional KES 55 billion in Kenyan companies. Its cumulative investments rose from KES 442 billion in June 2021 to KES 497 billion, firmly establishing its position as the largest provider of capital, supporting 143 companies, up from 138 in 2021.
  1. The government intends to restructure National Hospital Insurance Fund (NHIF) from an individual to a household contributory scheme in a bid to make it a social insurance cover rather than an occupational scheme for salaried individuals. The move also aims to grow the population under cover as well as make Universal Health Coverage an achievable reality.
  1. NSSF Uganda plans to increase the company’s assets under management to $5.2 billion in 2023. The state controlled corporation invests solely in East Africa, being one of the regions largest investor of bonds and equities, its most recent investments being almost half of the shares on offer for MTN Uganda’s IPO and increasing its holdings in Kenyan Eurobonds. The fund’s portfolio allocation is currently around 78% in fixed income, 15% in equities and 7% in alternative assets.
  1. Nigeria’s inflation soared to a 17-year high of 20.8% in September, compared to 20.5% recorded in August on the back of rising food prices and supply chain disruption. The food index, which accounts for more than half the inflation basket rose 23.3% from 23.1% in August. Inflationary pressures continue to push the policy committee to increase interest rates to curb inflation.

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