Kenya’s foreign exchange reserves have risen by 2.5 per cent to $15.25 billion (Sh1.97 trillion) in the week ending September 10, 2026, Central Bank of Kenya (CBK) data has shown.
The increase ideally strengthens the country’s buffer against external shocks as looming El Niño threatens to disrupt agricultural production and increase demand for imports.
The reserves rose from $14.88 billion (Sh1.93 trillion) a week earlier, marking the first increase after three consecutive weeks of decline and giving the CBK a larger foreign currency cushion ahead of the expected weather disruptions.
The latest reserve position is equivalent to 6.3 months of import cover, well above the CBK’s statutory requirement to endeavour to maintain at least four months of import cover.
Foreign exchange reserves act as a financial buffer that Kenya can rely on when demand for dollars rises sharply, or foreign currency inflows weaken.
In simple terms, they give the CBK room to supply dollars to the market when the country needs to pay for additional imports such as food and fuel, helping to ease pressure on the shilling.
This buffer could become increasingly important if El Niño rains disrupt agricultural production and force the country to rely more heavily on imported food and other essential goods.
Higher import demand would increase the need for dollars and could put additional pressure on the local currency.
The Meteorological Department has warned that El Niño rains are expected to become significant from October and could continue into early 2027.
It has placed the probability of strong El Niño rains at 81 per cent, with a 97 per cent probability that their effects could persist into early next year.
The weather conditions could affect food supplies, infrastructure and economic activity, potentially increasing import requirements at a time when Kenya is also exposed to external risks, including the ongoing conflict in the Middle East.
According to CBK Governor Kamau Thugge, the country’s foreign exchange reserves provide a cushion against short-term external shocks, including weather disruptions and the impact of the Middle East conflict.
“Whether the conflict in the Middle East continues, we should have enough buffer to ensure that we do not have a disorderly adjustment in the exchange rate,” Thugge said during a post MPC briefing in August.
The latest improvement in reserves comes despite weaker diaspora remittance growth.
Data by the apex bank shows remittances declined by 2.4 per cent in the 12 months to June, prompting the regulator to lower its full-year growth projection to 0.7 per cent from an earlier 1.5 per cent.
The central bank expects remittance inflows to improve in the second half of the year if the Middle East conflict de-escalates.
