GROWTH

Kenyans abroad sent Sh31 billion home in March, a three-month high

The US remains the largest source of these inflows, accounting for 55.9 per cent of remittances during the month

In Summary
  • CBK said remittance inflows continue to provide a stable source of foreign exchange for Kenya and key support for many households.
  • The diaspora inflows together with Sh33 billion of Sh255 billion from the IMF facility shored up the forex reserves.
CBK Headquarters
CBK Headquarters
Image: FILE

Kenyans abroad sent home $290.8 million (Sh31.15 billion) in March, the highest inflows since December last year, further boosting the country's forex reserves. 

This represented a 27.1 per cent increase compared to a similar period last year. The growth also surpassed that of February where $260.2 million (Sh28.6 billion) was sent back to the country. 

According to the Central Bank of Kenya, remittance inflows continue to provide a stable source of foreign exchange for Kenya and key support for many households, totaling $3.09 billion (Sh330.6 billion) in 2020.

On Friday, the apex bank said that the usable foreign exchange reserves remained adequate at $7.66 billion  (4.71 months of import cover) compared to $7.4 billion or 4.56 months of import cover the previous week. 

''This meets the CBK’s statutory requirement to endeavour to maintain at least four months of import cover, and the EAC region’s convergence criteria of 4.5 months of import cover,'' the banking regulator said in the latest weekly bulletin. 

The diaspora inflows together with Sh33 billion of Sh255 billion from the IMF facility shored up the forex reserves, stabilising the shilling against major international currencies. 

''The Kenya shilling strengthened against major international and regional currencies during the week ending April 15, on the back of strong forex inflows,'' CBK said. 

It exchanged at 106.81 per US dollar on April 15, compared to 108.24 per US dollar on April 8. 

Wednesday, the banking regulator quoted the shilling at 108.43. 

The US remains the largest source of these inflows, accounting for 55.9 per cent of remittances in March 2021. Kenyans in the North American region sent home $177.4 million last month compared to $160.8 million in February. 

The other top source countries were: UK (11.2 per cent), Saudi Arabia (four  per cent), Canada (2.9 per cent), and Australia (2.9 per cent).

Diaspora remittances are now the leading forex earner for Kenya after agricultural exports and limping tourism receipt crashed by after-effects of Covid-19. 

On Wednesday, CBK said that the importance of remittances has revealed a need for more information that would support policy decisions.

It has since collaborated with the Kenya National Bureau of Statistics and the Ministry of Foreign Affairs to roll out an anonymous online Kenya Diaspora Remittances Survey that is running from March 19 to May 17, 2021.

The Survey focuses on the costs and efficiency of sending remittances, the difficulties encountered in sending cash or non-cash remittances, how remittances are used by the recipients, and the availability of information on investment opportunities in Kenya.