NAIROBI, March 3 (Reuters) - Kenya’s central bank said it plans to buy $100 million every month between March and June to increase foreign reserves and that it will purchase a minimum $1 million from banks at prevailing rates in each deal.
The bank has bought dollars in the past through open market operations, but it does not usually disclose the target amount or any other details.
New developments across the globe, including a significant drop in oil prices, have opened a new window for a more formal dollar purchase programme, the Central Bank of Kenya (CBK) said in a statement seen by Reuters.
“This would bolster CBK’s preparedness to deal with heightened global volatility and uncertainties,” it added.
The East African nation imported petroleum products worth $3.31 billion last year, at an average price of $66.5 per barrel, the bank said.
That average price has now dropped to $51 per barrel, offering significant savings and opportunity to increase reserves, it added.
“These purchases will be conducted while ensuring that they do not introduce volatility and instabilities in the foreign exchange market,” the bank said. (Reporting by Duncan Miriri and Clement Uwiringiyimana; Editing by Shri Navaratnam)