NAIROBI, Oct. 13 (Xinhua) -- Kenya's foreign exchange reserves dropped by 39 million U.S. dollars this week as the Central Bank (CBK) worked to stabilize the shilling amid rising importers' demand.
The dollar reserves on Friday stood at 7.37 billion dollars, an equivalent of 4.9 months of import cover, Central Bank of Kenya data showed.
This was a decline from 7.41 billion dollars, an equivalent of estimated 4.92 months of import cover where they ended last week.
The reserves have been on a downward trend since mid-September where they had peaked at 7.55 billion dollars.
The biggest decline was recorded at the end of September where they fell from 7.48 billion dollars, or an equivalent of 4.97 months of import cover to 7.41 billion dollars.
The Kenyan shilling remained relatively stable in the week before declining Friday to close at 103.3, which explains why the dollar reserves declined with a relatively smaller margin.
However, analysts at Cytonn, a Nairobi-based investment firm, noted that the reserves would rise due to dollar inflows from horticulture export earnings that have kept in check demand from oil importers
There have also been increased diaspora remittances, with the Central Bank data showing diaspora remittances reached 166.4 million dollars in August compared to 152.3 million dollars in July. Enditem
