Banks forex deposits rebound to Sh570bn

The value of foreign currency deposits held by Kenyans in commercial banks rose by Sh15 billion in September to Sh570 billion, recovering after a two-month slide that came after the extension of the deadline of the tax amnesty for those remitting foreign assets back home.

Kenya National Bureau of Statistics (KNBS) data sourced from Central Bank shows the deposits are now back close to the all-time high of Sh574.7 billion recorded in June, when there was a rush to bring home foreign cash as the original deadline of the amnesty loomed at the end of that month.

Central Bank of Kenya (CBK) on its part has said the recent rise in the foreign currency deposits is also indicative of the sharp increase in ordinary remittances sent back home by Kenyans living abroad, saying banks have introduced new products targeting the diaspora, which have been effective in growing volumes.

Improved weather

Kenyans are also spending less foreign exchange on the import side, especially on food due to improved weather.

“(There is) increased exports of tea and horticulture, increased diaspora remittances, strong receipts from tourism, and lower imports of food and SGR-related equipment relative to 2017,” said CBK in a monetary policy committee statement last month.

In the 12 months to October, remittances rose 42 percent to Sh229.2 billion compared to a similar period in 2017, CBK data shows.

Tea exports in the meantime rose by eight percent in the same period to hit Sh147 billion, while tourism receipts rose by 10 percent to Sh105 billion.

The diaspora remittances had hit an all-time monthly high of Sh27.3 billion in June, coinciding with the amnesty deadline.