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How the Kenyan diaspora saved Christmas in a big way this festive season

Christmas season
  • Dollars remitted home by Kenyans living abroad during the festive period helped the shilling regain some of the ground it lost against the greenback earlier this month.
  • Remittances have in the past gone up significantly during the month of December compared to the rest of other 11 months of the year.
  • Remittances are crucial in many Kenyan homes with the money sometimes dependable by whole families

The Kenyan diaspora saved Christmas in a big way this festive season.

Dollars remitted home by Kenyans living abroad during the festive period helped the shilling regain some of the ground it lost against the greenback earlier this month.

Light demand for the dollar in the local market also helped the local currency.

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On Monday, commercial banks traded the shilling at an average of 101.80 units to the US dollar, a slight appreciation from the closing rate of 101.84 recorded on Friday.

With just three trading days this week due to the Christmas and Boxing Day holidays, the currency is expected to remain trading in a tight range as most investors sit out.

On Monday, traders said that dollar demand from oil and merchandise importers remained subdued on the day, and is likely to remain so until the end of the week, while banks were also selling some of their dollar holdings in order to meet shilling reserve requirements at the Central Bank of Kenya.

At the end of last week, the latest data from CBK showed, official foreign currency reserves went up by $25 million (Sh2.5 billion) to $8.005 billion (Sh815 billion), suggesting that the regulator was taking up some of the dollars being sold by commercial banks.

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Remittances are crucial in many Kenyan homes with the money sometimes dependable by whole families to pay for school fees, medicines, food and development. Hundreds of Kenyan families have lift themselves out of Poverty through remittances.

Remittances have in the past gone up significantly during the month of December compared to the rest of other 11 months of the year.

Last year, December remittances stood at Sh20.8 billion, against a monthly average of Sh16.2 billion between January and November.

The same trend was also witnessed in 2016, when the December remittances stood at Sh16.4 billion against an average of Sh14 billion for the rest of the year.

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One of the sectors which has especially gained during the festive period as a result of the increased remittances is the multi-billion tourism industry.

Hoteliers in Mombasa have reported that in the December holiday season, the number of international holidaymakers has gone up by 22.4 percent over last year, following an increase in the number of chartered, international direct and local daily flights to coastal resort city.

Kenya is currently the 4th largest remittance recipient in Africa and, according to the Central Bank of Kenya diaspora remittances have overtaken revenue from tea, coffee, and tourism as the top foreign exchange earner.

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Email: news@pulselive.co.ke

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