Foreign Exchange Reserves

The usable foreign exchange reserves stood at USD 7,017 million (3.80 months of import cover). This falls short of CBK’s statutory requirement to endeavour to maintain at least 4.0 months of import cover as well as the EAC region’s convergence criteria of 4.5 months of import cover.


The Kenyan Shilling depreciated against the Dollar and the Sterling Pound but appreciated against the Euro to exchange at KES 160.62, KES 204.23 and KES 174.43 respectively. The observed depreciation against the Dollar is attributed to a high demand from general importers.

CurrencyYTD ChangeW-o-W Change
Sterling Pound2.19%0.30%


Liquidity in the money markets increased, with the average inter-bank rate decreasing from 13.76% to 13.66%, as government payments more than offset tax remittances. Open market operations remained active.

LiquidityWeek (previous)Week (ending)
Interbank rate13.76%13.66%
Interbank volume (billion)13.8818.81
Commercial banks’ excess reserves (billion)19.6026.90

Fixed Income


T-Bills remained over-subscribed during the week, with the overall subscription rate decreasing to 101.97%, down from 146.99% recorded in the previous week. The 91-day T-Bill received the highest subscription rate at 413.96% while the 182-day T-Bill and 364-day T-Bill had subscription rates of 52.43% and 26.72% respectively. The acceptance rate decreased by 7.49% to close the week at 89.53%.


In the secondary bond market, there was a higher demand for the week’s bond offers. Bond turnover increased by 10.84%, from KES 17.36 billion in the previous week to KES 19.24 billion. Total bond deals increased by 8.42% from 546 in the previous week to 592.

In the primary bond market, CBK issued a new 8.5-year infrastructure bond, IFB1/2024/8.5, seeking KES 70 billion. The new bond coupon rate will be market-determined. The sale runs from 24/01/2024 to 14/02/2024.


In the international market, yields on Kenya’s Eurobonds increased by an average of 0.22% compared to the previous week, 0.40% month-to-date and 0.40% year-to-date. The yields on the 10-year Eurobonds for Angola declined while that of Zambia increased. Below is a summary analysis of performance for individual bonds.

BondYTD ChangeM-o-M ChangeW-o-W Change
2014 10-Year Issue0.14%0.14%0.00%
2018 10-Year Issue0.41%0.41%0.26%
2018 30-Year Issue0.27%0.27%0.14%
2019 7-Year Issue0.89%0.89%0.50%
2019 12-Year Issue0.39%0.39%0.24%
2021 13-Year Issue0.31%0.31%0.20%

NASI, NSE 20, NSE 25 and NSE 10 settled 3.21%, 1.24%, 2.41% and 2.72% lower compared to the previous week, bringing the year-to-date performance to -1.74%, -0.72%, -0.69% and -1.10% respectively. Market capitalization also lost 3.21% from the previous week to close at KES 1.41 trillion, recording a year-to-date decrease of 1.74%. The performance was driven by losses recorded by large-cap stocks such as EABL, Safaricom and KCB of 11.44%, 6.09% and 5.99% respectively. This was however mitigated by the gain recorded by Co-operative Bank of 5.73%.

The Banking sector had shares worth KES 390.6M transacted which accounted for 71.27% of the week’s traded value, Manufacturing and Allied sector had shares worth KES 17M transacted which represented 20.60% and Safaricom, with shares worth KES 112.9M transacted represented 20.60% of the week’s traded value.

Top Gainers and Losers in the Equities Markets

Top GainersYTD ChangeW-o-W
Car & General8.00%8.00%
LosersYTD ChangeW-o-W
EA Breweries2.16%-11.44%
TP Serena-7.08%-7.93%

Alternative Investments

LosersWeek (previous)Week (ending)% Change
Derivatives Turnover (million)1.372.2362.35%
Derivatives Contracts14.0051.00264.29%
I-REIT Turnover (million)0.020.221,027.14%
I-REIT deals9.0015.0066.67%

Global and Regional Markets

Global MarketsYTD ChangeW-o-W
S&P 5003.12%1.06%
Dow Jones Industrial Average (DJI)1.05%0.65%
FTSE 100 (FTSE)-1.12%2.32%
STOXX Europe 6001.11%3.11%
Shanghai Composite (SSEC)-1.76%2.75%
MSCI Emerging Markets Index-3.86%-1.12%
MSCI World Index1.48%1.29%
Continental MarketsYTD ChangeW-o-W
FTSE ASEA Pan African Index5.47%1.09%
JSE All Share-1.03%3.43%
NSE All Share (NGSE)34.76%8.32%
DSEI (Tanzania)-3.46%-2.28%
ALSIUG (Uganda)0.00%0.11%

The US stock market closed the week in the green zone, buoyed by investor optimism following positive corporate earnings and lower-than-expected annual core personal consumption expenditures index (PCE), which fell slightly below the 3% forecast. Inflation is expected to decline even further, as investors look forward to the Federal Reserve meeting slated at the end of this month.

The European stocks closed the week on an upward trajectory, fueled by a surge in heavy-weight luxury stocks in Paris, particularly LVMH’s impressive end-year results. Furthermore, investors optimism was boosted by the European Central Banks’s dovish signals during its recent meeting.

The Asian stock market closed the week on a positive trend, buoyed by China’s surprise Reserve Requirement Ratio (RRR) cut and fresh policy pledges. Beijing unveiled a 50-basis-point RRR reduction, injecting 1 trillion Yuan into the economy and signalling its commitment to economic and market stability.

Week’s Highlights

  • The Court of Appeal rejected the state’s application to stay the decision made by the High Court on the Finance Act ruling, implying that the 1.5% housing levy, payable by both employees and employers, remains suspended until the appeal’s final outcome. This ruling offers relief for households and businesses potentially affected by the levy, which faced legal challenges due to lack of a comprehensive legal framework. The levy was part of the June 2023 finance law that also doubled the value-added tax on fuel.
  • Kenya discovered its first deposits of the valuable mineral coltan, a vital mineral used in the manufacture of cell phones, laptops and other communication gadgets. This discovery, which span across Embu, Samburu, Turkana, West Pokot and Tana River, is expected to fuel economic growth and propel Kenya’s tech industry forward. Notably, once mining begins, 20% of mining revenue will be allocated directly to county governments and 10% to residents, paving way for communities to thrive and reduce reliance on national funds.
  • The Competition Authority of Kenya approved the proposed unconditional acquisition of a 100% stake in Rafiki Millers Limited by the third largest miller, Kitui Flour Mills Limited. Rafiki Millers, which ceased operations in April 2021, held a 3% share of the Kenyan wheat milling market and engaged in confectionery production. This move strengthens Kitui’s position in the industry, potentially boosting its market share and bringing it closer to market leaders like Mombasa Maize Millers and Grain Industries Limited.
  • The Ethiopian Capital Market Authority (ECMA) announced a historic directive: the Capital Service Providers Licensing and Supervision Directive. This comprehensive legal framework sets clear rules for licensed activities, licensing requirements and the responsibilities of market participants. It marks a pivotal moment for Ethiopia’s capital market, aiming to enhance integrity, stability, investor protection and market transparency.
  • The European Central Bank (ECB) kept interest rates unchanged at record-high levels during its first meeting in 2024 and promised to keep them at sufficiently restrictive levels until inflation is back to its 2% target. For the third time in a row, the primary refinancing operations rate remained stable at 4.5%, while the deposit facility rate continued to hover around 4%. President Lagarde emphasized that any rate cuts talks were premature. Despite ending rapid hikes in September, the ECB remains vigilant due to lingering inflation and geopolitical uncertainties, like the Red Sea blockade’s potential impact on energy supplies.
  • The People’s Bank of China (PBoC) kept its lending rates steady at the January fixings in an effort to support an economic recovery. This cautious approach saw both the one-year loan prime rate (LPR) for corporate and household loans maintain at a record low of 3.45% for the fifth consecutive month and mortgage rates remain at 4.2% for the seventh month in a row. This strategy coincided with Q4 GDP growth increasing 5.2% year-on-year, exceeding the government target. For the full year, the economy expanded by 5.2%, a significant improvement from 3.0% recorded in 2022.
  • The S&P Global United Kingdom Composite PMI increased to 52.5 in January 2024, up from 52.1 in December, defying expectations and marking its highest level since June 2023. This was primarily driven by the services sector, which expanded at its fastest pace since May 2023 and job creation also recovered after a five-month low. New orders rose at the fastest pace in eight months, despite a temporary dip in manufacturing output. Inflation remains a mixed bag, with input costs rising but businesses softening their increase in prices. Finally, business confidence reached its highest level since May 2023, pointing towards a strong 2024.
  • The S&P Global US Composite PMI increased to 52.3 in January 2024, up from 50.9 in December, marking the strongest growth since June 2023. Services led the charge, expanding at their fastest pace in seven months and new business also grew at the fastest pace since June 2023, despite a dip in exports. While manufacturing remained soft, job creation continued to rise, and business confidence reached its highest level since May 2022. Additionally, price pressures eased, with input costs at their second-lowest since October 2020 and output prices rising the least since May 2020.

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