Diaspora remittances rise to Sh53 billion in October

Kenyans in the diaspora continued supporting their families back home by increasing the level of financial support to $355.6 million (Sh53.9 billion) in October compared to $340.4 million (Sh51.6 billion) in September.

Cumulatively, according to the Central Bank of Kenya (CBK) weekly bulletin for the period ending November 17, the inflows for the 12 months to October 2023 totaled $4,165 million (Sh631.2 billion) compared to $3,996 million (Sh605.6 billion) in the same period in 2022, an increase of 4.2 per cent, with the US retaining its position as the largest source of remittances into Kenya accounting for 54 per cent in October 2023.

Support families

The inflows are used to support families and friends back home. They are also an important source of foreign exchange (forex) to finance imports, pay debts, build reserves and support the country’s current account by reducing trade deficit.

The October remittance is the second highest this year from July which recorded the highest ever amount to be sent back home by Kenyans when inflows hit $378.1 million (Sh57.3 billion).

Diaspora remittances from African countries to Kenya posted a 42 per cent growth in the seven months to July as more Kenyans continue to seek jobs and study abroad, especially in the continent

The search for ‘greener pastures’ in terms of employment and education is the biggest factor pushing Kenyans to go try their luck abroad.

The Western Union’s inaugural Global Money Transfer Index had projected an increase in remittances, fuelled by the weakening shilling that has now gone past Sh150 mark against the US dollar.

In the review period, CBK said the Kenya Shilling remained relatively stable against major international and regional currencies, exchanging at Sh152.11 per US dollar compared to Sh151.53 per US dollar the previous week.

Remitting when the shilling is weak favours Kenyans in the diaspora, who can leverage the purchasing power of the greenback and other major international currencies to benefit from pushing money back home.

CBK says usable forex reserves remained adequate at $6,785 million equivalent to Sh1.02 trillion, enough to support 3.6 months of import cover and meeting the regulator’s statutory requirement to maintain at least 4 months of import cover. The regulator maintains forex reserves to balance Kenya’s payments, help influence the rate of and support confidence in the market.

Kenya’s financial markets standing on the continent has recently taken a major beating from the country’s foreign exchange trouble tied to dollar shortages and a fall of forex reserves.