Kenyans abroad send record remittances back home in July

Kenyans living and working abroad sent home the highest ever amount in July, as well as the highest so far this year, thanks to easing inflation in the US, Kenya's largest remittance source.

Weekly data by the Central Bank of Kenya shows remittance inflows in July totalled $414.3 million (Sh53.5 billion at the current exchange rate), compared to $378.1 million (Sh48.8 billion) in July 2023, an increase of 9.6 percent.

In dollar terms, the July record is the highest inflows the country has ever had and the new highest record for the year so far, after offsetting January's high of $412.4 million.

The underlying US inflation eased for a fourth month on an annual basis in July, creating room for more disposable income and keeping the Federal Reserve on track to lower interest rates next month.

Various jurisdictions, including Kenya and the UK, have already slashed their base lending rates to ease the cost of living.

The CBK Bank lowered the benchmark Central Bank rate earlier this month to 12.75 per cent from the decade-high of 13 per cent.

The US remained the country's largest source of remittances in the month under review, accounting for 52 per cent of the total inflows.

The Central Bank of Kenya. (Photo: File)

"The cumulative inflows for the 12 months to July 2024 remained steady at $4,572 million (Sh590 billion) compared to $4,076 million (Sh526 billion) in a similar period in 2023, an increase of 12.2 per cent," CBK says in the weekly bulletin.

"The remittance inflows continue to support the current account and the foreign exchange market."

According to WorldRemit research, Kenya is one of the continent's top recipients of remittances, with the country's primary uses being household needs, healthcare, and education.

Kenyans have also been investing more in the capital market and real estate in recent years, with the US, Canada, and the UK leading the way.

Last year, CBK launched the CBK DhowCSD, a web platform and mobile app that allows retail investors in Kenya and abroad to invest in government securities easily and conveniently.

The new platform allows retail investors to participate in securities auctions, view auction results and payment details, check upcoming corporate actions, access updated portfolio statements, and initiate secondary market and pledge instructions.

The inflows have also continued to support the Kenyan shilling, which hit a record low of Sh161 to the dollar sometime in January, as the country experienced a dollar shortage on the back of high demand by importers during the period.