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Diaspora send a record Sh8.6bn in Feb 2012

Diaspora remittances in February hit a record high of Sh8.65 billion ($103.98 million), owing to what Central Bank of Kenya termed as increased confidence in the economy by Kenyans living abroad.

This is the highest remittances have touched in the last six years, according to official statistics from CBK.

During the preceding month of January, the remittances totalled Sh7.45 billion ($89.6 million).

“Confidence in the economy remains strong as indicated by the increasing Diaspora remittances that stood at $103.98 million in February 2012,” read a statement from CBK that accompanied the decision by the Monetary Policy Committee to retain the CBK benchmark rate at 18 per cent.

The increased inflows are said to have played a key role in pushing up property prices in Kenya, ranking Nairobi and Mombasa as the top two cities with the highest rate of increase in property prices globally.

Mr Charles Koori, director of research at CBK has also attributed the growth in remittances to increased use of formal channels such as commercial banks and other permitted channels.

The figures come in as companies are battling to strategically position themselves to make a killing by mediating transactions.

Western Union, PostaPay, mobile money transfer services and customised card payment systems offering easy, fast and secure means have played a key role in formalising remittances.

Total remittances for 2011 stood at Sh74.12 billion ($891.1 million) ranking it among the country’s top earners of forex, with tea leading at about Sh109 billion.

Analysts are optimistic that with continued increase in Diaspora remittances, Kenya will narrow its current account deficit and help stabilise the home currency against the dollar and other world major currencies.

“Remittances are an income for the country and their growth will definitely help strengthen the shilling,” said Mr David Achungo, investment manager at Pinebridge Investments.

The latest figures affirm local research that has pointed to the growing interest in the real estate sector, demand for hard assets and investment opportunities in the equity and bond markets as the main drivers of increased remittance.

“The prevailing returns on investments that range between 16 to 17 per cent are definitely attractive for someone who has borrowed at between 4 to 5 per cent.

The numbers of Kenyans living in the Diaspora are also going up in addition to the Diaspora increasingly wealthy,” said Mr Achungo.

source:Daily Nation Thursday, April 5 2012
Posted on:11-Jun-2012 pm30 8:10:51 pm
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