The shilling stayed stable and foreign exchange reserves edged higher in the week ending October 29, the Central Bank of Kenya (CBK) said in its weekly bulletin released on Friday, October 30, while trading at the Nairobi Securities Exchange (NSE) dropped sharply after the previous week’s block trade.
The shilling exchanged at Sh129.96 to the US dollar on October 29, compared with Sh129.91 on October 22. Reserves stood at $14.74 billion, equivalent to 5.9 months of import cover, up from $14.69 billion a week earlier and above the statutory minimum of four months.
The money market remained liquid, with commercial banks’ excess reserves averaging Sh32.6 billion above the 3.25 percent cash reserve ratio. The Kenya Shilling Overnight Interbank Average (KESONIA) held at 8.75 percent.
Interbank activity cooled, with an average of 18 transactions a day, down from 29, and the average value traded fell to Sh12.2 billion from Sh19.8 billion.
In the government securities market, the Treasury bill auction on October 29 drew bids of Sh51.9 billion against Sh28 billion on offer, a performance rate of 185.2 percent. The rate on the 182-day bill declined, while rates on the 91-day and 364-day bills edged up marginally.
On the equities market, the NSE All Share Index rose 4.16 percent, while the NSE 25 and NSE 20 indices fell 2.97 percent and 2.61 percent respectively. Market capitalisation slipped 0.22 percent.
Shares traded fell 97.55 percent and equity turnover dropped 91.54 percent, which the CBK blamed on the base effect of a block trade in Kenya Power and Lighting Company shares the previous week. Bond turnover in the secondary market rose 3.57 percent, and yields on Kenya’s Eurobonds fell 22.07 basis points on average, with those for Côte d’Ivoire and Angola also lower.
The bulletin also covered the global scene. The Bank of Canada raised its policy rate by 25 basis points, while the US Federal Reserve, European Central Bank, Bank of Japan and Reserve Bank of New Zealand held rates, as inflation concerns persisted. The US Dollar Index strengthened 0.22 percent.
Murban crude, the benchmark the CBK tracks, rose to $110.46 a barrel on October 29 from $108.23 on October 22. At 158.9 litres to a barrel and the shilling’s Sh129.96 rate, that is about $0.70 or Sh90.3 a litre. Spot gold slipped to $4,020.4 an ounce from $4,023.9, as markets anticipated a possible Fed rate rise in December.
The bulletin also notes that inflation rose to 7.3 percent in October from 6.8 percent.
