Banks' cash re­serves at CBK hit 11 month high

The Pak Banker - - FRONT PAGE - -AP

NAIROBI: The Cen­tral Bank of Kenya ( CBK) says Banks are re­quired to main­tain an av­er­age of 5.25 per cent of their to­tal de­posits daily in their ac­counts at the CBK. Last week, they ex­ceeded the CRR by Sh10.4 bil­lion, a sharp rise from the Sh4.4 bil­lion the pre­vi­ous week. It was also the high­est level since the week ended Septem­ber 13 when they stood at Sh10.7 bil­lion.

Cash re­serves held by com­mer­cial banks above the statu­tory re­quire­ment hit an 11-week high last week as lenders pre­pared to clear taxes, fresh data shows.

Banks are re­quired to main­tain an av­er­age of 5.25 per cent of their to­tal de­posits daily in their ac­counts at the Cen­tral Bank of Kenya ( CBK) for a month that ends on 14th. The cash is tech­ni­cally re­ferred to as Cash Re­serve Ra­tio ( CRR).

Last week, they ex­ceeded the CRR by Sh10.4 bil­lion, a sharp rise from the Sh4.4 bil­lion the pre­vi­ous week. It was also the high­est level since the week ended Septem­ber 13 when they stood at Sh10.7 bil­lion.

"This may be at­trib­ut­able to the fact that banks were ac­cu­mu­lat­ing liq­uid­ity to meet tax pay­ment obli­ga­tions that were due on Novem­ber 20," the CBK said in its weekly bul­letin.

The banks breached the CRR guide­line in the week ended Oc­to­ber 18 when their re­serves dropped Sh1.5 bil­lion below the thresh­old due to lim­ited cash cir­cu­la­tion. The lenders paid Sh32.8 bil­lion in taxes in five work­ing days to Novem­ber 22, lead­ing to a net bal­ance be­tween cash that was in­jected into the mar­ket and that with­drawn. About Sh64.6 bil­lion was pumped into the mar­ket, largely com­prised of bond re­demp­tions at Sh27.9 bil­lion and govern­ment pay­ments (Sh23.9 bil­lion).

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.