In October, Kenyans who work and reside overseas sent home an extra Sh2.3 billion, compared to $340.4 million (Sh51.89 billion) in September.
According to the most recent data from the Central Bank of Kenya (CBK), remittance inflows in October 2022 totaled $332.6 million, a 6.9% rise from $355.6 million (Sh54.2 billion) in October 2022.
“The cumulative inflows for the 12 months to October 2023 hit $4,165 million (Sh634.9 billion) compared to $3,996 million (Sh609.1 billion) in the same period in 2022, an increase of 4.2 percent,” CBK says in its weekly bulletin.
Reason for the increase
As seen in the Kenyan news publication, The Star, the reduction of inflationary pressures in major economies, such as the US, may be the reason for the increased remittances.
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It could also be the case that, as anticipated by Western Union's first Global Money Transfer Index, which indicated a rise in remittances driven by the weakening shilling, migrant workers are taking advantage of the declining value of the shilling relative to the dollar to send more money home.
From a peak of $378.1 million (Sh57.6 billion) sent in July and $354.3 million (Sh54 billion) sent in August, the inflow for September decreased to $340.4 million (Sh51.89 billion).
The most sum ever sent home by Kenyans was reported in July 2023. Nevertheless, the extra sum did little to stop the nation's foreign exchange reserves from further depreciating.
From $6,833 million (Sh1.04 trillion), or around 3.67 months' worth of import cover, a month earlier, forex reserves fell to a low of $6,785 million (Sh1.03 trillion), or 3.6 months' worth of import cover. This falls short of the legally mandated minimum of four months' import coverage at all times.
The United States continues to be the greatest supplier of remittances to Kenya, accounting for 54% in October 2023. Saudi Arabia has recently emerged as the leading donor to the significant growth in remittances going into Kenya.