Money from Kenyans in diaspora down by Sh1 billion in September

Kenyans living and working abroad slashed money sent home in September by Sh1.25 billion, compared to the previous month in which they remitted the highest ever amount on record.

The weekly data by the Central Bank of Kenya shows remittance inflows in September totalled $418.5 million (Sh54.065 billion at the current exchange rate), two per cent down from $427.2 million (Sh55.19 billion) the previous month.

Compared to the same period last year when the inflows totalled $340.4 million (Sh44 billion), the record is an increase of 22.9 per cent.

Notably, the August inflow set the highest monthly record as well as the highest so far this year, thanks to easing inflation in the US, Kenya's largest remittance source.

"The cumulative inflows for the 12 months to September 2024 increased by 14.0 per cent to $4,723 million (Sh610.2 billion) compared to $4,142 million (Sh535.1 billion) in a similar period in 2023," CBK says in the weekly bulletin.

"The US remains the largest source of remittances to Kenya, accounting for 55.4 per cent in September 2024."

CBK adds that the remittance inflows continue to support the current account and the foreign exchange market.

"The usable foreign exchange reserves remained adequate at $8,485 million (Sh1.1 trillion), just about (4.4 months of import cover) as of October 24. This meets the CBK's statutory requirement to endeavour to maintain at least 4 months of import cover," the weekly bulletin reads.

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.

Diaspora 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.

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.

In the past one month, the local currency has held stable against the US dollar, exchanging at an average of 129.19 according to the daily updates by the apex bank.