Diaspora Remittances & Horticulture Exports Support Kenya Shilling
The Kenyan Shilling has continued to hold firm due to inflows from horticulture exports and diaspora remittances supplying end month dollar demand from manufacturers and some multinational companies.
The Central Bank of Kenya(CBK) quoted the mean exchange rate for Kenya Shilling against the US Dollar buying at KSh 106.2694 and selling at KSh 106.4694 against the greenback.
“The Shilling might remain relatively stable in the long term. With the IMF standby facility in place, the Shilling could weather the storm,” said Felix Ochieng, a dealer at Faida Investment Bank.
On Tuesday, the local unit was quoted by commercial banks at 106.30 buying and 106.50 selling against the US dollar. This is compared to KSh 106.35 and KSh 106.55 at Monday’s close.
The Kenya Shilling has been exchanging within narrow ranges, ahead of the Central Bank of Kenya Monetary Policy Committee meeting, scheduled to take place tomorrow, June 25th, 2020.
Data from Central Bank of Kenya shows that total diaspora remittances within the first four months of this year were US$ 259,392.71 in January, US$ 218,991.93 in February, US$ 228,810.78 in March and US$208,217.73 in April.
Diaspora remittances, horticulture exports support Kenya Shilling
Diaspora remittances are now Kenya’s leading source of forex, ahead of tourism and agricultural exports such as tea, coffee, and horticulture. Figures provided by CBK are considered as estimates due to the fact that remittances through other unofficial channels are usually not captured, meaning that dollar inflows in Kenya could be higher than what CBK reports.
In May this year, the IMF approved $739Million Disbursement to Kenya to deal with COVID-19 related disruptions including cushioning the Kenyan shilling from economic shocks that could distort the country’s balance of payments position.