During the month, CBK noted that remittances from US and South Africa decreased slightly compared to June. Kenyans living in North America sent home a historic high of Sh15.7 billion ($145.95 million) in May. Remittances in the first seven months to J...
During the month, CBK noted that remittances from US and South Africa decreased slightly compared to June. Kenyans living in North America sent home a historic high of Sh15.7 billion ($145.95 million) in May. Remittances in the first seven months to July were 3.9 percent higher than in the same period in 2019.
Cash sent home by Kenyans living abroad in July dropped by Sh1.2 billion compared to the previous month, loosening back after three months of growth.
The Central Bank of Kenya (CBK) data shows that, in July, remittances amounted to $277 million (Sh29.9 billion) from $288.5 million (Sh31.2 billion) sent in June.
However, the inflows, which is the largest source of foreign exchange in the country, have increased by 23.1 per cent compared to the $225 million sent home in July last year.
CBK noted during the month that US and South African remittances were down slightly compared to June.
The US is the highest nation in terms of contributions to the inflows.
In May Kenyans living in North America sent a record high of Sh15.7 billion ($145.95 million) to their country.
This has seen the country increase its share of overall remittances to 56.5 percent of the Sh27.78 billion ($258.15 million) that was sent to Kenya in May.
The Pew Research Center based in Washington reports that there are currently some 90,000 Kenyans living in the US, including as many as 30,000 without authorisation.
The nation has, however, emerged as a global hotspot for Covid-19 and faces economic pressures from ongoing political unrest and the forthcoming elections.
In the other side, there are influxes from UK, Saudi Arabia , Qatar and Germany.
"Remittance inflows stayed high at $277 million in July 2020 compared to $225 million in July 2019 and $288.5 million in June 2020, in line with the seasonal factors," said CBK.
The CBK data shows net inflows exceeding $2.862 billion (Sh309 billion) in the 12 months to July 2019 , compared with $2.778 billion (Sh300 billion) in the 12 months to July 2019, reflecting a three percent increase.
Relation between payments
Remittances were 3.9 per cent higher in the seven months to July than in the same timeframe of 2019.
The stabilization of remittances following April's dip has helped reduce the current account deficit to 4.7% of GDP in the 12 months to July vs 5.0% compared to 5.0 percent of GDP in the 12 months to June.
"Provisional balance of payments data reveals that the current account deficit has shrunk to 4.7% of GDP in the 12 months to July 2020, compared with 5.0% of GDP in the 12 months to June. This represented lower oil imports, and increased tea exports and receipts for remittances, "CBK said.
Amid the decline, the CBK is expecting an increase in this year's annual amount as opposed to 2019.
In a brief post-Monetary Policy Committee meeting held in July, CBK Governor Patrick Njoroge said the regulator expects the volumes of remittances to rise by at least one per cent this year.
This was a turnaround from an earlier projection by the CBK that the remittances were going to drop by 12.3 percent, which was made in the early days of the Covid crisis in Kenya.