Kenya’s foreign exchange reserves are projected to strengthen in the coming weeks following fresh dollar inflows from a partial government stake sale in Safaricom and a successful Eurobond issuance in international capital markets. The developments are expected to improve the country’s external position, support fiscal financing, and help stabilize the local currency amid ongoing global financial pressures.
According to the latest bulletin from the Central Bank of Kenya (CBK), Kenya’s reserves stood at Sh1.63 trillion (about $12.66 billion) as of February 19. This level is equivalent to roughly 5.5 months of import cover, comfortably above the statutory minimum threshold of four months, signaling a relatively strong buffer against external shocks and import financing risks.
The government recently raised Sh290.3 billion (approximately $2.25 billion) through a new Eurobond sale. The funds form part of Kenya’s broader liability management strategy aimed at smoothing debt maturities, lowering refinancing risks, and ensuring continued access to global capital markets while supporting the national budget.
Out of the Eurobond proceeds, Sh64.5 billion ($500 million) will be used to finance the buyback of existing Eurobonds. Under the tender offer, Kenya plans to repurchase up to $350 million of its 8 percent amortizing notes due in 2032 and up to $150 million of its 7.25 percent notes due in 2028, reducing near-term external repayment pressure and improving debt sustainability indicators.
Additional support to reserves is expected from the government’s disposal of a 15 percent stake in Safaricom, which generated approximately Sh206.4 billion ($1.6 billion). The transaction was further boosted by an upfront dividend payment of about Sh39.9 billion ($309 million), adding to the inflow of foreign currency and strengthening the country’s external liquidity position.
The anticipated rise in reserves is expected to ease pressure on the Kenyan shilling by improving dollar availability in the domestic market. CBK data indicates that during the review period the currency remained relatively stable at around Sh129.02 per US dollar, reflecting improved market confidence and adequate supply of foreign exchange.
Money market conditions have also remained stable, with sufficient liquidity observed across the banking sector. The Kenya Shilling Overnight Interbank Average (KESONIA) stood at 8.77 percent, suggesting balanced short-term funding conditions. Together, the Eurobond proceeds and Safaricom stake sale are expected to reinforce macroeconomic stability, strengthen investor confidence, and provide Kenya with a firmer external buffer in the months ahead.
