Foreign Exchange Reserves

The usable foreign exchange reserves stood at USD 6,468 million (3.60 months of import cover). This falls short of CBK’s statutory requirement to endeavor to maintain at least 4.0-months of import cover as well as EAC region’s convergence criteria of 4.5-months of import cover.


The Kenyan Shilling depreciated against the Dollar and the Sterling Pound but strengthened against the Euro to exchange at KES 136.88, KES 171.55 and KES 149.36 respectively. The observed depreciation against the Dollar is attributed to a high demand for the currency, which has caused a market shortage.

CurrencyYTD ChangeW-o-W Change
Sterling Pound15.34%0.07%


Liquidity in the money markets increased with the average interbank rate declining from 9.83% to 9.19%, as government payments more than offset tax remittances. Open market operations remained active.

LiquidityWeek (previous)Week (ending)
Interbank rate9.83%9.19%
Interbank volume (billion)26.5830.53
Commercial banks’excess reserves (billion)17.3018.20

Fixed Income


T-Bills were over-subscribed during the week, with the overall subscription rate recorded as 188.91%, up from 110.72% performance recorded in the previous week. The 91-day T-Bill received the highest subscription rate at 865.75% while the 182-day T-Bill and 364-day T-Bill had a subscription rate of 88.44% and 18.64% respectively. The acceptance rate increased by 3.91% to close the week at 99.88%.


In the secondary bond market, there was a lower demand for the week’s bond offers. Bond turnover decreased by 1.23% from KES 14.94 billion in the previous week to KES 14.75 billion. Total bond deals increased by 5.90% from 373 in the previous week to 395.

In the primary bond market, CBK released auction results for the newly issued FXD1/2023/003 which sought to raise KES 20.0 billion. The issue was oversubscribed receiving bids worth KES 20.74 billion, representing a subscription rate of 103.72%. KES 20.29 billion worth of bids were accepted at a weighted average rate of 14.23%.


In the international market, yields on Kenya’s Eurobonds decreased by an average 0.61% compared to the previous week, 0.87% month to date and increased 2.90% year to date. The yields on the 10-Year Eurobonds for Angola and Ghana increased. Below is a summary analysis of performance for individual bonds.

BondYTD ChangeM-o-M ChangeW-o-W Change
2014 10-Year Issue4.64%-3.02%-2.19%
2018 10-Year Issue2.79%-0.81%-0.44%
2018 30-Year Issue1.46%-0.37%-0.25%
2019 7-Year Issue4.14%-0.41%-0.38%
2019 12-Year Issue2.08%-0.32%-0.18%
2021 13-Year Issue2.28%-0.27%-0.19%

NASI, NSE 20 and NSE 25 settled 9.19%, 4.06% and 7.96% lower compared to the previous week bringing the year to date performance to -26.51%, -12.13% and -20.19% respectively. Market capitalization lost 9.22% from the previous week to close at KES 1.46 trillion recording a year to date decline of 26.58%. The performance was driven by losses recorded by large-cap stocks such as Safaricom, Equity and KCB of 15.87%, 10.43% and 9.81% respectively.

The Banking sector had shares worth KES 205M transacted which accounted for 14.53% of the week’s traded value, Manufacturing & Allied sector had shares worth KES 187M transacted which represented 13.25% and Safaricom, with shares worth KES 1B transacted represented 70.86% of the week’s traded value.

Top Gainers and Losers in the Equities Markets

Top GainersYTD ChangeW-o-W
Standard Group-7.18%6.59%
LosersYTD ChangeW-o-W

Alternative Investments

Week (previous)Week (ending)% Change
Derivatives Turnover (million)0.041.042870.83%
Derivatives Contracts1.0023.002200.00%
I-REIT Turnover (million)0.100.29201.62%
I-REIT Deals3025-16.67%

Global and Regional Markets

Global MarketsYTD ChangeW-o-W
S&P 5007.84%-0.29%
Dow Jones Industrial Average (DJI)0.50%-1.11%
FTSE 100 (FTSE)2.65%-0.31%
STOXX Europe 6007.21%0.04%
Shanghai Composite (SSEC)5.00%-1.86%
MSCI Emerging Markets Index1.08%-0.88%
MSCI World Index8.01%-0.45%
Continental MarketsYTD ChangeW-o-W
FTSE ASEA Pan African Index-0.52%-0.11%
JSE All Share6.73%0.62%
NSE All Share (NGSE)1.20%-0.48%
DSEI (Tanzania)-5.82%-2.58%
ALSIUG (Uganda)-13.33%-5.01%

US indices ended the week lower as consumer stocks declined. The worst-hit consumer equities were Amazon, Carnival Corporation and Norwegian Cruise Line Holdings. The S&P 500 and the Dow recorded a decline of 0.3% and 1.1% respectively as Walt Disney lost subscribers. On the other hand, PacWest, which saw a decline in deposits, led the way as regional bank shares continue to fall. Rising Treasury yields had a negative impact on tech stocks such as Apple and Tesla. According to market experts, further interest rate hikes are to be expected as long as inflation remains high.

European indices recorded mixed performance as the Bank of England raised its interest rate by 0.25% to 4.5% to manage high inflation. Energy was one of the hardest hit sectors due to decreased oil prices. HSBC, Europe’s largest bank and Volkswagen recorded losses as they traded without dividend entitlement. Investors are concerned about China’s dismal trade figures, which are crucial for the eurozone’s largest exporters.

Asia Pacific indices in the past week recorded a marginal decrease as a result of weak economic indicators. The Shanghai Shenzhen CSI 300 and Shanghai Composite indices declined as trade and inflation statistics from the previous week cast doubt on the projected economic comeback following the lifting of COVID-19 limitations. Furthermore, SoftBank Group Corporation, an investment behemoth, saw its shares decline after registering a second consecutive yearly loss.

On the global commodities markets, Crude Oil WTI and ICE Brent Crude closed the week 1.72% and 1.59% lower at $70.09 and $74.17 respectively. Gold futures prices settled 0.43% lower at $2015.90.

Week’s Highlights

  • The Energy and Petroleum Regulatory Authority (EPRA) released the retail prices of petroleum products which will be in force from 15th May 2023 to 14th June 2023. The pump price of Super Petrol has increased by KES 3.40 to KES 182.70 per litre, Diesel by KES 6.40 to KES 168.40 per litre and Kerosene by KES 15.19 to KES 161.13 per litre. The susbsidy on Diesel and Kerosene has been removed.
  • The National Treasury gazetted the actual revenues and expenditure for the 10 months of the financial year 2022/23 ending 30th April 2023. Total revenue collected during the month amounted KES 1.64 trillion, accounting for 76.64% of the original KES 2.14 trillion estimates for the FY2022/23. The figure lies below the KES 1.78 trillion prorated amount expected for the first ten months of the year. Total expenditure amounted KES 2.32 trillion, translating to 65.37% of the original estimates. The deficit was plugged by a total KES 686.59 billion in financing.
  • The Retirement Benefits Authority has granted ICEA Lion Life Assurance regulatory authority to manage Tier II payments (employees earning more than KES 18,000) from businesses who opt out of the National Social Security Fund (NSSF). After Enwealth and CPF Financial Services, this is the third pension provider to receive this approval. This will be accomplished through the use of ICEA’s pension products, which include Individual Pension Plans, Umbrella Retirement Benefits Schemes and Group Retirement Schemes. ICEA aims to assist employers with the opt-out procedure by delivering high-quality assistance and has also hinted at high investment returns.
  • The Kenya Revenue Authority (KRA) will implement the eTIMS system on June 1, 2023. This will ensure that all VAT (electronic tax invoice) registered taxpayers generate electronic invoices that are sent to KRA in real time or near real time. In accordance with the VAT Regulations 2020, all registered taxpayers are required to accept only electronic tax invoices from registered taxpayers for the purposes of claiming input tax and processing refunds. Non-resident registered suppliers of digital services are exempt from this law but must issue invoices indicating the amount of the supply and the tax imposed. VAT-registered taxpayers who have not complied with the VAT Regulation 2020 will not be awarded Tax Compliance Certificates. Likewise, VAT refunds shall only be processed and paid for taxpayers compliant with the regulations. This move will be critical in increasing revenue collection, which aligns with the government’s intention to collect more.
  • National Treasury data indicates China’s funding for the 2023–2024 fiscal year is expected to drop from KES 29.5 billion to KES 1.74 billion. This is as a result of China’s increased caution when lending to Africa due to loan defaulters and borrowing capacity restrictions. On the other hand, the World Bank and the International Monetary Fund (IMF) have expanded funding to Kenya, with the World Bank slated to provide a KES 136.5 billion loan to ease the cash flow issue and increase foreign exchange reserves. According to the IMF, Kenya has applied for a long-term funding facility through the Resilience and Sustainability Trust, which seeks to assist low and middle-income countries in building resilience to external shocks such as the financial crisis, political instability and climate change among others.
  • China’s annual inflation rate dipped to 0.1% in April 2023, down from 0.7% in March, falling short of market expectations of 0.4%. This was the lowest result since February 2021, despite a mixed economic recovery following the end of COVID-19 restrictions, with food and non-food prices easing further. Core consumer prices rose 0.7% year on year, a similar rate to March, excluding volatile food and energy prices. Consumer prices fell 0.1% month on month, the third consecutive month of decline, falling short of expectations for a flat result.
  • US annual inflation dropped to 4.9% in April 2023 from 5% in March 2023, which was below experts’ expectations of 5% and fell for the tenth straight week. The monthly growth was mostly driven by housing expenses, followed by used vehicles and gasoline. The fall in other energy sector components was more than compensated by the increase in the gasoline index. The Consumer Price Index (CPI) consequently increased to 0.4% in April from 0.1% in March. Although inflation in the US is noticeably lower than in other nations, the Federal Reserve is nevertheless raising interest rates to combat it.
  • The Bank of England raised interest rates by 0.25% to 4.5% in May 2023. The action is meant to offset the country’s high inflation, which has pushed borrowing costs to their highest level since 2008. The central bank expects core inflation to fall to 5.1% in Q4 2023, a lower forecast from the 3.9% projection in February for the same time period and is expecting to reach the 2% objective by late 2024. Policymakers continue to closely monitor inflationary pressures indicators such as labor market tightness, wage growth behavior and service price inflation. More tightening of monetary policy would be required if persistent pressure is observed.

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