According to new CBK data, Kenyans living and working abroad sent home a record Ksh.369.4 billion ($3.053 billion) in the nine months to the end of September.
This represents a 12.7% year on year increase in diaspora remittances, which stood at Ksh.327.9 billion ($2.71 billion) at the same time in September 2021.
Remittances totaled Ksh.38.5 billion ($318 million) in September alone, representing a 2.6 percent increase over Ksh.37.5 billion ($309.8 million) the previous year.
For the umpteenth time, the United States remained the largest source of remittances into Kenya, accounting for 59% of total flows in September.
The Central Bank of Kenya (CBK) has attributed the current account and foreign exchange market support to strong remittance inflows.
When combined with improved export earnings in the first half of 2022, remittances helped reduce Kenya’s current account deficit (CAD) to 4.6 percent of GDP in the 12 months to June, down from an expected 5.3 percent, according to balance of payments data released earlier this week by the Kenya National Bank.
Gains from rebounding exports and strong remittances have been offset, however, by an overbearing US dollar, with the Kenya Shilling sinking to a new record low of Ksh.121 on Thursday to reflect the stronger green buck.
The weaker Shilling has put pressure on the Central Bank of Kenya’s official foreign exchange reserves, with the cover falling this week to Ksh.882.4 billion ($7.294 billion), or 4.11 months of import cover.
Nonetheless, the reserves exceed CBK’s statutory requirement of keeping at least four months of import cover.
