August foreign cash inflows from abroad have hit a record high, fresh data from the Central Bank of Kenya shows.
CBK figures show that foreign inflows reached Sh17.18 billion ($166.41 million). This represents a 13.4 per cent jump compared to $146.74 million (Sh15.15 billion) sent the same period last year.
This is the third time cash from Kenyans living and working abroad has passed the $160 million mark including December which recorded $160.94 (Sh16.61 billion) and May at $161.5 million (Sh16.67 billion).
Diaspora remittance for the eight months to August rose 7.08 per cent to $1.21 billion (Sh124.91 billion) up from $1.13 billion (Sh116.65 billion) recorded during the same period in 2016.
Month-on-month inflows rose by 9.26 per cent from $152.31 million (Sh15.72 billion).
Foreign inflows, which have remained the country’s largest source of foreign exchange over the past three years surpassing tourism, tea and horticulture exports, have been largely driven by investment in property and real estate development.
In July, analysts predicted a growth in inflows given the country’s political environment and the fact that Kenya had been facing an economic slowdown.
“When there are economic challenges, there’s increase in remittance. Kenyans abroad are more likely to send in money to aid their families through these tough economic times,” Stanbic Bank regional economist Jibran Qureishi said.
He said the slowdown characterised by decreased lending to the private sector by commercial banks, the prolonged drought that lasted up to five months and mass retrenchments in firms across the country were more likely to result in a spike in the value of foreign cash inflows.