Kenyans Abroad Defy Trends, Send an Extra Sh2.3 Billion Home

In October, Kenyans residing and working abroad sent an additional Sh2.3 billion back home up from the Sh51.89 billion sent in September.

The Central Bank of Kenya's latest data reveals that remittance inflows in October 2022 reached $332.6 million, marking a 6.9% increase from the $355.6 million received in October 2021. The easing inflationary pressures in major economies, such as the United States, could be a contributing factor to the rise in remittances. Another possible explanation is the weakening value of the shilling, as predicted by Western Union's Global Money Transfer Index, which suggests that migrant workers are capitalizing on this trend to send larger sums of money home.

There was a decrease in remittance inflow for September, which fell to $340.4 million following July's peak of $378.1 million and August's peak of $354.3 million. The high remittance amount seen in July 2023 didn't have much effect on the depreciation of the nation's foreign exchange reserves which are at $6,833 million or roughly 3 trillion Kenyan shillings. The total value of Kenya's foreign reserves has dwindled to an all-time low of $6,785 million (Sh1.03 trillion), equal to 3.6 months of import coverage.

This falls short of the mandated minimum of four months of import cover, exposing the nation to potential economic instability. The US towers above others in remittances to Kenya, with a 54% stake in total remittances as of October 2023. Nevertheless, Saudi Arabia has recently established itself as a prominent donor with a considerable upsurge in remittances sent to Kenya.