NAIROBI, Kenya – Remittances from Kenyans working and living abroad dropped at the start of 2025, marking a potential shift in inflow trends amid changing global economic and political landscapes.
According to data from the Central Bank of Kenya (CBK), diaspora remittances stood at $427.4 million (Sh55.5 billion) in January, down from $445.4 million (Sh57.9 billion) in December.
While the decline may signal early economic pressures, it still represents an increase compared to January 2024, when remittances totaled $412.4 million (Sh53.6 billion).
The decline comes as the US, Kenya’s largest remittance source, moves forward with immigration and economic policies under President Donald Trump’s administration.
Experts warn that the tough stance on immigration and funding could further impact inflows in the coming months.
Although CBK did not specify reasons for the January dip, financial analysts suggest that uncertainty surrounding US policy could be a factor.
Despite the monthly drop, cumulative remittances for the 12 months leading up to January 2025 increased by 16.6%, reaching $4.96 billion, up from $4.25 billion in the same period last year.
CBK noted that remittance inflows remain a crucial pillar of Kenya’s economy, supporting the current account balance and foreign exchange market.
The US continued to dominate as the primary source, accounting for 53.2% of total remittances in January.
The remittance inflows helped sustain Kenya’s foreign exchange reserves, which stood at $9.4 billion (Sh1.2 trillion) as of February 13—equivalent to 4.8 months of import cover, meeting CBK’s statutory requirement of at least four months.
Meanwhile, investor confidence in short-term government securities showed signs of wavering, with Treasury bill auctions undersubscribed.
The CBK received 2,526 bids against the 4,000 offered, as yields continued to slide. The return rate dropped from 9.1% to 8.9%, extending a downward trend that began in November 2024.
Several banks, including Cooperative Bank, have already cut average lending rates by 2–3% to stimulate borrowing and economic activity.
