CBK Report: Global Oil Prices Surge as Kenya Shilling Holds Steady

Prices for global oil surged significantly in the period between May 14 and May 22, 2026, due to increasing geopolitical instability in the Middle East, as per the reports published by the Central Bank of Kenya(CBK).

The price for Murban crude oil went up to $97.51(approximately Ksh 12,647.05) per barrel on May 21, 2026, compared to $94.84 (approximately Ksh 12,300.75) per barrel on May 14.

The report noted that inflation concerns remained elevated globally as the conflict in the Middle East continued to disrupt investor confidence and energy supply expectations.

“International oil prices increased in the week ending May 21, 2026, amid heightened geopolitical risks in the Middle East,” the bulletin stated.

According to the Central Bank of Kenya, the U.S. Dollar Index strengthened by 0.4 percent during the review period as investors weighed the possibility of a near-term agreement to end the Middle East conflict.

In addition, headline inflation in the Eurozone rose to 3.0 percent in April 2026 from 2.6 percent recorded in March, while inflation in the United Kingdom remained above its target level, although it fell marginally to 2.8 percent.

Kenya Shilling is Steady

In spite of market volatility globally, the Kenyan Shilling maintained its stability against the other major foreign currencies for the week ended May 21, 2026.

The local currency quoted at Ksh 129.57 to the U.S dollar on May 21 compared to Ksh 129.27 on May 14.

The Central Bank attributed the relative stability of the shilling to adequate foreign exchange reserves, which stood at USD 13,211 million(approximately Ksh 1.7 billion) as of May 21.

The reserves represented 5.6 months of import cover, exceeding the statutory requirement of maintaining at least four months of import cover.

“The foreign exchange reserves remained adequate,” the report said.

Money Market Records Strong Liquidity

Kenya’s money market remained liquid throughout the review week, supported by active open market operations by the Central Bank.

Commercial banks’ excess reserves averaged Ksh 6 billion above the 3.25% Cash Reserve Ratio requirement.

The Kenya Shilling Overnight Interbank Average Rate remained unchanged at 8.75% on May 21, the same level recorded a week earlier.

The average number of interbank transactions also remained stable at 20.

Nevertheless, the volume of transactions carried out through the interbank market rose to Ksh 12.8 billion from Ksh 10.7 billion in the preceding week.

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Treasury Bills Gain Favorable Response

A Treasury bills auction held on May 21 generated total bids of Ksh 30 billion against advertised amounts of Ksh 24 billion, recording a performance ratio of 125.2%.

Interest rates on the 182-day Treasury bills declined, while those of the 91-day and 364-day Treasury bills increased marginally.

Meanwhile, the Treasury bond auction held on May 20 for the reopened 15-year and 20-year treasury bonds received bids totaling Ksh 47.2 billion against an advertised amount of Ksh 50 billion, representing a performance rate of 94.3%.

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Nairobi Securities Exchange Declines

At the Nairobi Securities Exchange, the NASI, NSE 25 and NSE 20 share price indices declined by 0.43 percent, 0.51% and 1.33% respectively during the week ending May 21, 2026.

Market capitalization, total shares traded and equity turnover also fell during the period.

According to the bulletin, total shares traded declined by 22.68% while equity turnover dropped by 24.75%, reflecting reduced investor activity at the bourse.

In the bond market, turnover in the domestic secondary market decreased by 20.04%.

The report further indicated that yields on Kenya’s Eurobonds increased by an average of 35.46 basis points in the international market, mirroring trends seen in Côte d’Ivoire and Angola where yields also rose.

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CBK Governor Kamau Thugge and the Kenya shilling notes. PHOTO/ File