Money wired home by Kenyans living abroad dropped by KShs 1.2 billion in July as compared to the previous month, easing back after three months of increase.
Data from the Central Bank of Kenya (CBK) shows remittances in July amounted to $277 million (KShs 29.9 billion) from $288.5 million (KShs 31.2 billion) sent in June.
The inflows, which are the country’s largest source of foreign exchange, have however increased by 23.1% when compared to the $225 million that was sent home in July of last year.
During the month, CBK noted that remittances from U.S and South Africa decreased slightly compared to June.
U.S is the largest country in terms of the inflows’ contributions. However, the country has emerged as a global hot-spot and faces economic tensions from ongoing racial protests and the upcoming elections.
On the other hand, inflows from the United Kingdom, Saudi Arabia, Qatar, and Germany increased.
“Remittance inflows remained strong in July 2020 amounting to $277 million compared to $225 million in July 2019 and $288.5 million in June 2020, in line with seasonal factors,” CBK said.
The CBK data shows the cumulative inflows in the 12 months to July totaled to $2.862 billion (KShs 309 billion) compared to $2.778 billion (KShs 300 billion) in the 12 months to July 2019, representing a three percent increase.
Remittances in the seven months to July were 3.9 percent higher than in the same period in 2019.
The stabilization of remittances since the dip in April has helped narrow the current account deficit to 4.7 percent of GDP in the 12 months to July compared to 5.0 percent of GDP in the 12 months to June.
“Provisional data on balance of payments shows that the current account deficit narrowed to 4.7 percent of GDP in the 12 months to July 2020 compared to 5.0 percent of GDP in the 12 months to June.
“This reflected lower oil imports and improvement in tea exports and remittance receipts,” CBK said.
Despite the drop, the CBK is projecting that there will be an increase in the annual volume this year compared to 2019.
In a post- Monetary Policy Committee meeting brief held in July, CBK’s governor Patrick Njoroge said the regulator is expecting the remittance volumes to grow by at least one percent 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-19 crisis in Kenya.
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