Kenya’s diaspora remittances grew to $345.9 million (over KSh 48.9 billion) in the past 12 months to June 2023, the Central Bank of Kenya (CBK) report has shown.
This was a 6.1% increase from $326.1 million (KSh 46.1 billion), reported during a similar period in June 2022.
Foreign exchange rates
CBK noted that the inflows supported the current account and the foreign exchange market.
“The cumulative inflows for the 12 months to June remained steady at $4,017 million (KSh 568.4 billion) compared to $4,012 million (KSh 567.7 billion) in a similar period in 2022, an increase of 0.1%,” read CBK weekly bulletin in part.
The US remained the largest source of remittances to Kenya, accounting for 54% in the month of June 2023.
This followed the continued depreciation of the Kenya shilling, which hit an all-time low of KSh 141 per unit US dollar.
CBK data showed the shilling traded at KSh 141.29 per unit US dollar as of Thursday, July 13, compared to KSh 117 per unit in June 2022.
Strengthening the shilling
Lead market analyst at FX Pesa Kenya, Rufas Kamau, noted the continued dollar strength saw the shilling shed 14% of its value in the first half of the year 2023.
“So far we have experienced the Kenyan shilling continuing to weaken against the dollar to trade at KSh 141. The Kenya shilling has lost 14% of its value against the US dollar in H1 2023, having started the year at 123.28,” said Kamau in an exclusive interview with TUKO.co.ke.
This translated to increased payment for Kenyans receiving money from abroad and those paid in the US currency.
However, Kamau is adamant that the shilling will regain its value owing to a drop in US inflation in June 2023 to 3%.
“In the future, we will be expecting the Kenyan shilling to stabilise following the fundamentals that have changed in the market.
The drop in US inflation means that the US did not continue hiking interest rates, and we expect the dollar to start weakening against other currencies,” he said.
By Wycliffe Musalia
Source-https://www.tuko.co.ke/
