The Central Bank of Kenya recently revealed that diaspora remittances in the country grew by a significant margin in August 2024, compared to the same 31 day period last year.
Last month Kenyans abroad sent home $72.9 million (Sh9.4 billion) a 20.6% increase from August 2023. The total diaspora remittance hit a total of $427.2 million (Sh55.09 billion).
“Remittance inflows in August 2024 totaled $427.2 million (KSh 55.1 billion) compared to USD 354.3 million (KSh 45.7 billion) reported in August 2023, which represents a 20.6% growth,” said CBK.
A report by The Star, shows that inflows were $4.645 billion (Sh593 billion) in the 12 months ending August 2024, up from $4.120 billion (Sh529 billion) in the same period in 2023, representing a 12.7 percent rise.
This growth according to the publication is a result of the growing trust of Kenyans living abroad in their home country’s economic potential.
The recent inflow which is the largest seen over the last four years is also driven by the Fed’s rate decrease, which has caused economies to open.
The Kenyan publication, Tuko, in an interview with market analyst at FXPesa Rufas Kamau was able to garner that the decline in the US Federal Reserve interest rate has a major impact on the value of the shilling.
“The Fed surprised the market with a 50 basis point rate cut to 4.75%-5% on Wednesday, September 18. This is expected to weaken the USD and could drive the Kenya shilling higher towards 120,” said Kamau.
Last month the United States accounted for 56% of all remittances sent to Kenya, making it Kenya’s most significant source of remittance.
The Middle East, Canada, and the United Kingdom are important sources of remittances as well; these countries together provide a sizeable portion of the nation’s foreign exchange revenues.
