Kenya’s foreign exchange reserves have risen to US$12 billion, providing the country with more than five months of import cover and marking one of the strongest reserve positions in recent years, according to the Central Bank of Kenya.
The increase, confirmed during the final Monetary Policy Committee (MPC) meeting of 2025, underscores a steady buildup in the country’s foreign currency holdings and gives the central bank greater capacity to cushion the economy against external shocks.
CBK Governor Kamau Thugge said the reserves, measured as of December 8, now stand at levels equivalent to 5.3 months of import cover, well above both statutory thresholds and regional benchmarks.
“The foreign account reserves have increased quite significantly, as of December 8, reaching 12 billion dollars, equivalent to 5.3 months of import cover,” Thugge told reporters after the MPC meeting. “We believe that these levels of reserve provide adequate cover and a buffer against any short-term shocks.”
Kenya began 2025 with reserves hovering between US$9.0 billion and US$9.4 billion, strained by elevated import bills and earlier pressures on the shilling. But reserve levels recovered steadily over the year as inflows improved and foreign obligations were met without major market turbulence.
Between July and September, reserves fluctuated between roughly US$10.7 billion and US$11.2 billion, equivalent to 4.7 to 4.9 months of import cover. A sharper rise followed in October and November, lifting the stock to between US$12 billion and US$12.3 billion and boosting cover to about 5.3 to 5.4 months.
Thugge said the stronger reserve position has been instrumental in stabilising the Kenyan shilling, which has traded within a narrow band in recent months after a period of volatility earlier in the year.
He attributed the improved external position to diversified inflows including exports, diaspora remittances and foreign-denominated debt proceeds which have helped rebuild reserves even as import demand remained elevated. The governor noted that the healthy level of reserves now provides the CBK with improved confidence and flexibility in managing currency pressures.
Analysts react Central Bank of Kenya’s decision
Analysts say the build-up also reflects tighter monetary policy, smoother external debt rollovers and improved investor sentiment following Kenya’s return to the global capital markets earlier in the year. Higher earnings from tea, horticulture and tourism have further supported inflows, while diaspora remittances have remained one of the country’s most reliable foreign exchange sources.
The improvement comes at a time when Kenya faces substantial external financing needs, including large debt servicing obligations in early 2026. Economists say maintaining a strong reserve position is crucial in shielding the economy from sudden shifts in global financial conditions, commodity price swings or geopolitical disruptions that could raise import costs.
By holding reserves equal to more than five months of import requirements well above the minimum level often recommended by international financial institutions Kenya signals resilience to potential short-term balance-of-payments shocks.
The MPC said it would continue monitoring the external environment, noting that global uncertainty remains high as commodity markets fluctuate and interest rates in major economies remain elevated.
A robust reserve position, the CBK added, also strengthens investor confidence by assuring markets that Kenya has sufficient buffers to meet foreign obligations and sustain stability in the currency market.
Despite the encouraging outlook, the MPC warned that sustained discipline will be required to keep reserve levels adequate, especially if import demand continues to grow or if external debt servicing peaks in the coming year.
For now, policymakers say the latest figures mark a significant improvement in Kenya’s financial resilience as the country heads into 2026.
The Committee said it will continue to monitor the external environment to ensure reserves remain adequate “to cover import needs and protect the economy from short-term pressures.”
CBK added that the strengthened reserve position has helped reinforce investor confidence, signalling that Kenya is better prepared to absorb external shocks as it heads into 2026.
