January remittances hit all-time high of Sh60bn

Diaspora remittances to Nairobi from Kenyans living abroad hit an all-time high of Kes60.15 billion ($412.4 million) in January, marking an 18 percent increase from the comparable month last year.

The Central Bank’s latest data shows an uptick in funds compared to December 2023, with an increase of 10.7 percent.

“The cumulative inflows for the 12 months to January 2024 totaled $4,253 million (Kes620.3 billion) compared to $4,039 million (Kes589 billion) in the same period in 2023, an increase of 5.3 percent,” CBK says in its weekly bulletin.

While the Central Bank did not specify the reasons behind this steady increase, financial experts attribute it to Kenyans in the diaspora participating in the local bond market in the month under review through the DhowCSD platform.

Launched in September 2023, DhowCSD has streamlined the process of opening trading accounts, reducing the setup time from 14 days to mere minutes.

This efficiency has led to a rapid growth in the number of trading accounts in just a short span since the platform’s introduction.

John Gachora, Chairman of the Kenya Bankers Association and Managing Director of NCBA, highlighted the strong participation of local lender’s in the KES70 billion Infrastructure bond.

This bond, which aimed to raise Kes70 billion, received bids worth Kes288.6 billion, with Kes240.9 billion being accepted by the Treasury.

Read also: Paving the way for Kenyans in the diaspora to thrive

Largest source of inflows

The diaspora’s involvement in this trade could have played a pivotal role in driving January’s remittance inflows to a historic high.

At the moment, the United States remains the largest source of remittances to Kenya, accounting for 54 percent of the total in January.

The cumulative inflows for the 12 months leading up to January 2024 totaled $4,253 million (Kes620.3 billion), a 5.3 percent increase from the same period in 2023 according to CBK.

This surge in remittances could also be attributed to the weakening shilling, which breached the 160 mark during this period. Despite the shilling’s subsequent rally against major currencies, the impact on remittance inflows remains significant, pointing to a potential increase in the coming months.

Last week, the Kenyan shilling experienced a steady rally against major currencies US Dollar, British Pound, and the Euro, with the local unit closing at 142.91 against the greenback at close of trading on Friday.

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