Diaspora (Commonwealth Union) _ Kenyans living and working abroad sent home Sh5.8 billion less in February compared to January, marking a 10.6% decline in remittance inflows.
Latest data from the Central Bank of Kenya (CBK) shows that remittances totaled $382.2 million (Sh49.5 billion) in February, down from $427.4 million (Sh55.3 billion) in January. Compared to February 2024, when remittances stood at $385.9 million (Sh50 billion), the drop is about 1% yearoveryear.
Despite the monthly dip, cumulative remittances for the 12 months to February 2025 increased by 14.5%, reaching $4.96 billion (Sh641.8 billion) compared to $4.33 billion (Sh560.7 billion) in the previous year.
Why Did Remittances Decline? CBK attributes the drop partly to the stronger Kenyan shilling, which remained steady against the US dollar throughout February.
According to Western Union’s Global Money Transfer Index, 67% of Africans abroad send more money home when the local currency is weak, as receivers benefit from higher exchange rates. Conversely, when the shilling strengthens against the dollar, senders reduce remittances since recipients receive less in local currency.
Kenyan Shilling Strengthens Against the Dollar; The Kenyan shilling has shown significant appreciation over the past seven months, stabilizing at an average of 129 per dollar in February 2025. This level is a significant recovery from its historic low of 160 per dollar, representing a 19% strengthening.
While a stronger shilling lowers import costs, stabilizes inflation, and reduces the country’s external debt burden, it also means lower exchange gains for families relying on remittances.
The US Remains the Largest Source of Remittances
The United States remained the top source of remittances, contributing 53% of total inflows in February. The continued strength of the dollar and the relative stability of the Kenyan economy may influence remittance patterns in the coming months.
Outlook: What’s Next for Remittances?
While Kenya has seen strong annual remittance growth, future inflows may depend on:
- Currency fluctuations: A weaker shilling could lead to higher remittances.
- Global economic trends: Inflation and wage growth in diaspora host countries affect disposable income for remittances.
- Policy changes: Any tax or regulatory shifts on money transfers could influence inflows.
For now, Kenyans abroad may adjust their remittance patterns based on currency movements, ensuring their families maximize the value of sent funds.
