Kenyans in Diaspora Experience Decrease in January Remittances…

In January, remittances from Kenyans abroad decreased by Sh2.3 billion, totaling $427.4 million. The US accounted for 53.2 percent of these funds. While the shilling’s stability may complicate remittance decisions, total inflows over the past year increased significantly. Despite January’s decline, year-on-year comparisons show a slight overall growth in remittances.

In January, remittances from Kenyans in the diaspora decreased by Sh2.3 billion compared to December, according to the Central Bank of Kenya (CBK). The total remittance inflow for the month was $427.4 million (approximately Sh55.2 billion), down from $445.4 million (about Sh57.6 billion) the previous month. Despite this decline, there was a 3.6 percent increase compared to January of the previous year, when remittances totaled $412.4 million (Sh53.3 billion).

The US remains the leading source of these remittances, contributing 53.2 percent during the reviewed period. The consistent average exchange rate of the Kenyan shilling at 129 against the dollar may be influencing the decisions of diaspora Kenyans regarding sending money home. The CBK reported that cumulative inflows for the twelve months leading to January 2025 rose by 16.6 percent to $4,961 million (Sh641.1 billion) from $4,253 million (Sh549.6 billion) the previous year.

The stability of the Kenyan shilling, which traded at an average of 129.22 during January, has left diaspora Kenyans in a challenging position. A stable exchange rate can complicate decisions about remittance amounts, as indicated by findings from Western Union’s Global Money Transfer Index, which revealed that 67 percent of Africans abroad are inclined to send more funds home when the local currency depreciates, anticipating better exchange rates for receivers.

Over the past year, the Kenyan shilling improved against the dollar, strengthening by approximately 19 percent compared to the same period last year when it traded at an average of 160. This means diaspora Kenyans are receiving less value in exchange for the same amount sent home, further complicating their remittance decisions.

As the financial landscape continues to shift, it remains to be seen how these trends will evolve, but the reported decrease in remittances signifies a potential area of concern for the Kenyan economy that relies on these funds.

In conclusion, the remittances from Kenyans living abroad experienced a decline of Sh2.3 billion in January, despite the US being the largest contributor. The stable exchange rate of the Kenyan shilling against the dollar is posing challenges for diaspora Kenyans when deciding on remittances. However, compared to last year, there was still a slight increase in total inflows. The strengthening of the shilling may influence future remittance behaviors.

Original Source: eastleighvoice.co.ke