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Kenyans living and working abroad sent home more money in June, official data shows, as households and businesses continue to cash in on the weakening shilling to the dollar.
Diaspora remittances for June increased by Sh2.9 billion to $345.9 million (Sh49.1 billion).
This was from the $326.1 million (Sh46.2 billion) sent in the month of May, Central Bank of Kenya data shows, a 6.3 per cent increase.
The cumulative inflows for the 12 months to June remained steady at $4,017 million (Sh569.8 billion) compared to $ 4,012 million (Sh569.2 billion) in a similar period in 2022, an increase of 0.1 percent.
“The remittance inflows continue to support the current account and the foreign exchange market,” CBK said in its weekly bulletin released on Friday.
The US remains the largest source of remittances to Kenya, accounting for 54 percent in June 2023.
In the first quarter of 2023, remittances from Kenyans living in the diaspora went up by 10.6 per cent to Sh128.9 billion.
This, is compared to Sh116.6 billion sent home in the corresponding quarter of 2022, with the current exchange rates favouring recipients.
A recent report by international money transfer provider, Western Union shows 67 per cent of Africans abroad send more money when the currency value falls in their receiving country, with 65 per cent of receivers agreeing that when currency values fall, they get more money.
The survey further shows that a majority of Africans working abroad are optimistic that remittances will increase this year, with more than three-quarters of Africa’s receivers (78 per cent), saying they expect these remittances to increase.
Last month’s growth came even as the global economic outlook remains uncertain, reflecting continued concerns about financial sector stability in the advanced economies, continuing geopolitical tensions particularly the ongoing war in Ukraine, and the pace of monetary policy tightening in the advanced economies.
A study international money transfer service firm–WorldRemit showed Kenyans abroad had cut on their spending at the height of high inflation, to afford sending money back home.
Respondents in the study conducted in mid last year reported that they ate out less, 46 per cent saved on day-to-day expenses, while 28 per cent limited social gatherings to save money.
While inflation in the key source of US has been a major concern, remittances are nevertheless expected to remain stable, as Kenyans living in the diaspora continue to make sacrifices to support loved ones back at home.
A separate WorldRemit survey also showed more than half (54 per cent) of remittance senders have taken up a side hustle, with almost one-fifth doing so to be able to continue supporting families and friends back home.
The trend is expected to continue this year, as individuals search for secondary sources of income to supplement existing channels and support those back at home, who are also battling high inflation.
Dubbed the ‘Cost of Living Index’, WorldRemit sought to understand how the high inflation has affected the lives of international money senders around the world.
The survey found that 82 per cent of remittance senders, including Kenyan migrants who are key remittance senders in the US, Australia, and UK markets, agreed that the cost of living for the people to who they send money to has risen since the start of the year.
About 25 per cent of the respondents said they have opted for public transportation rather than driving to save, part of which has seen them continue to support families and friends back at home.
“Migrants’ resilience and commitment to their loved ones back home has proven to be vital, especially in a period where household expenses are increasing around the world,” said Jorge Godinez Reyes, Head of the Americas, WorldRemit.
The latest study proves that even during times of financial instability, many migrants are making adjustments to maintain the regular flow of remittances to families and loved ones back home, Reyes noted.
Education, healthcare and household needs continue to remain the main uses of remittances in Kenya, an analysis by the firm indicates. BY THE STAR