Diaspora (Commonwealth Union) _In March, Kenyans living and working abroad sent home a remarkable $2.85 billion, as per the latest data released by the Central Bank of Kenya (CBK).
According to the weekly bulletin, remittances for the month totalled $407.8 million (Sh53.2 billion), marking a 5.7% increase from the previous month. Despite a 6.4% decline in February from January’s record high of $412.4 million, March showed significant growth compared to the same period last year, up by 14.2%.
Over the 12 months leading to March 2024, cumulative inflows amounted to $4,380 million (Sh571 billion), a 9.0% increase from the corresponding period in 2023, according to CBK.
The United States remained the primary source of remittances, contributing 56% of the total inflows during the review period.
These increased remittance flows significantly bolstered the country’s forex reserves, which saw a notable uptick in March.
Forex reserves, currently the primary foreign exchange earner, stood at $7,088 million (Sh924 billion) by the end of March, representing approximately 3.8 months of import cover. While slightly below the statutory requirement of four months and the East African Community’s threshold of 4.5 months, this level still meets CBK’s mandate.
The reserves, largely denominated in dollars, act as crucial buffers against external economic shocks.
Last year, the reserves faced downward pressure, hitting a low of 3.54 months of import cover in December, largely due to the 2024 Eurobond maturity. However, the successful repayment of $1.5 billion of the debt in February boosted investor confidence.
The World Bank projects continued growth in remittance flows to Kenya and other Sub-Saharan countries this year, building on last year’s record-breaking trends. However, concerns about global inflation, low growth prospects, volatile oil prices, and currency fluctuations pose potential risks to this projection.
Despite these challenges, remittance flows to Low and Middle-Income Countries have remained resilient, supported by stable labor markets in advanced economies and Gulf Cooperation Council countries.
