- The cumulative inflows for the 12 months to July 2024 remained steady at $4.4 billion
- The US remains Kenya's largest source of remittances, accounting for 52% in July 2024.
Image: FREDRICK OMONDI
The easing inflation in the US created room for more disposable income which saw Kenyans living and working abroad send home the highest amount since December last year.
The weekly bulletin by the Central Bank of Kenya (CBK) shows that the country's diaspora population sent home $414.3 million (Sh53.4 billion) compared to Sh378.1 million (Sh49.1 billion) in June, representing a marginal percentage difference.
The easing cost of living in the global superpower in July is the time since March 2021 that inflation, as measured by the Consumer Price Index (CPI), fell below three per cent, solidifying expectations that the Federal Reserve will finally cut interest rates in September.
Various jurisdiction including Kenya and the UK have already slashed their base lending rates on easing the cost of living.
This is the highest amount the country has received from its citizens working abroad since December last year when at least Sh54 billion.
The US remains Kenya's largest source of remittances, accounting for 52 percent in July 2024.
Other top sources of remittances are Canada, the United Kingdom, Germany, Saudi Arabia, the United Arab Emirates and Australia.
The cumulative inflows for the 12 months to July 2024 remained steady at $4.4 billion (Sh568 billion) compared to $4.1 billion (Sh529 billion)in a similar period in 2023, an increase of 12.2 per cent.
"The remittance inflows continue to support the current account and the foreign exchange market,'' CBK said.
The highest monthly remittances in a year come after the country received the least amount in 14 months in June as the citizens abroad took a break to monitor activities around the Finance Bill,2024 that could have hiked transaction charges.
The controversial law had, for instance, proposed introducing a 16 percent Value Added Tax (VAT) on telegraphic money transfer services and foreign exchange transactions.
However, President William Ruto succumbed to the public uproar and completely rejected it after weeks of protests that have claimed at least 50 lives, hundreds injured, and property worth billions destroyed.
Last year, CBK launched the CBK DhowCSD, a web platform and a mobile App that allows retail investors in Kenya and abroad to invest in government Securities easily and conveniently.
The new platform allows retail investors to participate in securities auctions, view auction results and payment details, check upcoming corporate actions, access updated portfolio statements and initiate secondary market and pledge instructions.
The Kenya Shilling remained stable against major international and regional currencies during the week ending August 15 to exchange at Sh 129.20 compared to Sh129.41 per US dollar the previous week.
Even so, the apex bank did not give reasons for the strengthening shilling.
In 2017, diaspora remittances became Kenya's leading source of foreign exchange earnings, surpassing the revenues generated from tea, coffee, and tourism.
Diaspora inflows continue to surge, defying previous forecasts by various bodies including the World Bank which had predicted that remittance flows to Low and Medium Income Countries (LMICs) in the face of global inflation and low growth prospects.