Diaspora dollars set new record in July at Ksh.36.9B

Kenyans in the diaspora sent home Ksh.36.9 billion ($336.7 million), a new monthly record for the remittances.

This to represent a 21.6 per cent in the dollar inflows from a lower Ksh.30.4 billion ($277 million) on the same month last year and breaking the previous monthly high in the inflows set in May this year.

Cumulative remittances across 12 months now stand at Ksh.372.6 billion ($3.4 billion) in contrast to the previous Ksh.317.8 billion ($2.9 billion) or an equivalent 20.3 per cent rise in dollar inflows.

The United States has continued to lead the way as Kenya’s largest source of diaspora foreign exchange, covering 58.3 per cent of the July remittances.

The continued growth of the diaspora remittances is expected to offset the country’s declining foreign exchange earning potential as sectors such as tourism continue to witness turbulence from the COVID-19 crisis.

The remittances are not only a key source of income for households locally but are also government as the Central Bank of Kenya (CBK) stacks up the dollars to the official foreign exchange reserves vault.

The reserves at present stand at slightly over Ksh.1 trillion ($9.189 billion), and represent an equivalent 5.62 months of import cover.

The CBK occasionally taps the reserves to settle foreign debt and further sells dollars from the stock to alleviate pressure on the shilling when there is an unmatched demand for the green buck in the financial system.

$1=Ksh.109.6