The Kenyan Shilling has shown impressive strength against the US Dollar on Wednesday, trading between Ksh128.50 and Ksh129.50 per dollar, In return, a significant improvement was seen from last week’s rate of Ksh132.22 per dollar and continued the Shilling’s positive performance since early August.
Experts say the Shilling’s recent gain is mainly due to a rise in dollar inflows, particularly from diaspora remittances. A report from Reuters also noted that non-governmental organizations have helped meet importer demand by bringing more dollars into Kenya.
Central Bank of Kenya (CBK) Governor,Dr. Kamau Thugge explained that the increase in dollar inflows has helped reduce the need for loans in foreign currencies. “The drop in foreign currency loans shows that the Shilling is getting stronger,” Dr. Njoroge said during a recent update.
The CBK’s Quarterly Economic Review for the first quarter of 2024 highlighted a major boost from remittances, which reached Ksh156 billion. The United States was the largest source of these remittances, followed by the United Kingdom and other European countries.
Dr. Kamau noted, “Remittances from the diaspora have been a vital support for many Kenyan families and have greatly helped our national economy.”
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The boost in remittances will not only help individual households but also strengthen the Shilling, showing the important role of the money from diaspora remittances plays in the country’s financial health.