CBK Foreign Reserves Drop by Ksh11.77 Billion as Remittances Ease and Shilling Weakens
Kenya’s foreign exchange reserves have declined by Ksh11.77 billion in the latest reporting period, adding fresh focus to the country’s external liquidity position as the government races to close its books for the 2025/26 financial year.
New data released by the Central Bank of Kenya (CBK) shows that usable foreign exchange reserves fell to USD 13.149 billion (approximately Ksh1.70 trillion) from USD 13.240 billion (around Ksh1.71 trillion) recorded a week earlier.
The decline comes at a crucial period for the Treasury and government agencies, with the end of the financial year just days away and pressure mounting to settle obligations and reconcile accounts before June 30.
Despite the reduction, the CBK maintained that the country’s reserve position remains adequate and continues to provide a buffer against external economic shocks.
“The usable foreign exchange reserves remained adequate at USD 13,149 million (5.6 months of import cover) as of June 19, 2026. This meets the CBK’s statutory requirement to endeavour to maintain at least four months of import cover,” the regulator said in its weekly bulletin.
Foreign exchange reserves are a critical indicator of a country’s ability to finance imports, service external debt and support the local currency during periods of market volatility.
Remittance Inflows Decline
The latest reserve figures emerged alongside a slight decline in diaspora remittances, one of Kenya’s largest sources of foreign exchange earnings.
According to CBK data, remittance inflows fell by 0.9 per cent in May to Ksh50.98 billion, down from Ksh51.45 billion recorded in April.
The Ksh470 million drop also contributed to a decline in cumulative inflows over the last 12 months. Total remittances to May 2026 stood at Ksh647.7 billion compared to Ksh650.94 billion during the same period in 2025.
Even with the slowdown, the CBK emphasized the continued importance of diaspora earnings to the economy.
“Remittance inflows remain a key source of foreign exchange earnings and continue to support the balance of payments,” the Central Bank stated.
The decline comes months after findings from the Kenya National Bureau of Statistics (KNBS) revealed that approximately 50,000 Kenyans working abroad had returned home for various reasons, including the expiry of employment contracts.
While neither the CBK nor the KNBS directly linked the returning workers to the drop in remittances, analysts say changes in overseas employment patterns can significantly influence the amount of money sent back home.
Shilling Weakens Against Major Currencies
Meanwhile, the Kenyan shilling posted modest losses against major international currencies during the week.
Against the US dollar, the local currency weakened slightly to Ksh129.55 on Thursday from Ksh129.48 recorded on June 11.
The shilling also lost ground against the British pound, euro and Japanese yen.
CBK data shows the pound traded at an average of Ksh173.79 compared to Ksh173.35 the previous week, while the euro rose to Ksh150.16 from Ksh149.77.
Against the Japanese yen, the shilling slipped marginally to Ksh80.84 from Ksh80.79.
Although the movements were relatively small, economists often monitor such trends closely because sustained depreciation can increase the cost of imports, fuel inflationary pressures and raise the burden of servicing foreign-denominated debt.
With foreign reserves edging lower, remittance growth slowing and the shilling under mild pressure, attention will now turn to how Kenya navigates the final days of the financial year and whether external inflows rebound in the coming months.
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