Kenyans Deposit Over KSh 1.5t Worth of US Dollars in Banks as Shilling Weakens

 

Kenyans and companies dealing in imports increased their bank dollar deposits for the year ending December 2023. Central Bank of Kenya (CBK) governor Kamau Thugge speaking at a past event. Source: Facebook This is according to the Central Bank of Kenya (CBK) report, which showed that bank dollar deposits grew by 68% to KSh 1.55 trillion in value.  Why Kenyans stash dollars in local banks The growth in US dollar deposits to local banks followed a sharp decline in Kenyan shillings against the greenback. In December 2023, the shilling exchanged at KSh 153.34 against the dollar. According to Business Daily, the report contained in the National Treasury prospectus for its new Eurobond issue showed that companies dealing with imports increased their dollar deposits by 70% in September 2023, compared to 56% during the same month in 2022. The US currency gained 27% against the shilling during the same period under review, acting as a safe haven for investors who gained a lot of interest on their deposits. Companies held on to the greenback to avoid struggling to get the US currency in the market for their transaction obligations. In May 2023, CBK data showed dollar deposits had reached KSh 1.06 trillion, up from KSh 987.7 billion reported in February.

by  Wycliffe Musalia