Kenyans in the diaspora sent Sh2.3 billion less in remittances in January, totaling $427.4 million. The US remains the primary source, contributing 53.2 percent. Despite the drop, there was a 3.6 percent increase from January last year, while the shilling’s stability complicates sending decisions for diaspora Kenyans.
In January, remittances sent by Kenyans in the diaspora declined by Sh2.3 billion, reflecting a total inflow of $427.4 million (approximately Sh55.2 billion). This figure represents a decrease from December’s total of $445.4 million (around Sh57.6 billion), as reported by the Central Bank of Kenya (CBK). Despite the decline, the January figures exhibit a 3.6 percent increase compared to the same month in the previous year, when inflows amounted to $412.4 million (Sh53.3 billion).
Notably, December 2024 recorded the highest remittances in history for Kenyans abroad. The US remains the primary source of remittances, contributing 53.2 percent during this period. The bank did not specify reasons for the decline in January; however, the Kenyan shilling’s stability at an average of 129 against the dollar poses challenges for the diaspora in deciding whether to remit money.
Understanding exchange trends is crucial for the diaspora community. Research indicates that a significant proportion of Africans abroad, roughly 67 percent, tend to send more money when their home currency depreciates. Conversely, a stronger local currency translates to less value for recipients in Kenya, decreasing effective remittance value compared to prior years.
As of the end of January, CBK reported the shilling at 129.22, a consistent rate maintained for six months. This was a notable improvement from the prior year when the shilling averaged 160 against the dollar, indicating a 19 percent gain. Consequently, for example, the value of $100 remitted in January has effectively diminished by 19 percent compared to the previous year’s figures for the same time.
In summary, remittances from Kenyans abroad experienced a decline of Sh2.3 billion in January, reflecting the impacts of currency exchange rates. Despite this decrease, annual cumulative inflows show a positive trend. The US continues to be the leading source of these remittances. The stability of the shilling at an average of 129 has posed additional challenges for diaspora Kenyans in deciding upon their remittances, illustrating the complexities of international currency dynamics.
Original Source: eastleighvoice.co.ke
