Latest news with #CentralBankofKenya
Business Insider
14-07-2025
- Business
- Business Insider
Kenyans abroad are sending more money than ever
Kenyans in diaspora continue to play an important part in sustaining the country's economy, with remittances reaching an all-time high of USD 5.08 billion (KSh 656.99 billion) in the year leading up to June 2025. Remittances in June 2025 alone increased by 13.8% compared to June 2024. The Kenyan Central Bank noted remittance growth as a key contributor to foreign exchange earnings. August 2024 saw a significant rise in remittances, showing optimistic perspectives from the diaspora. This is a significant increase in diaspora contributions, confirming Kenya's ranking among the top ten African countries with the greatest remittance inflows. Remittances in June 2025 alone totaled USD 423 million (KSh 54.68 billion), up 13.8% from USD 372 million (KSh 48.06 billion) in June 2024, according to figures from the Central Bank of Kenya. The country's central bank further reported that 12-month total inflows to June 2025 climbed by 12.1% to USD 5.08 billion (KSh 656.99 billion) from USD 4.54 billion (KSh 586.09 billion) in the same period in 2024, as reported by Tuko. "The steady growth in remittance inflows remains a key source of foreign exchange earnings and continues to support the balance of payments," the bank stated. The upward trajectory has persisted, with a notable increase also observed in August 2024. That month, Kenyans living overseas remitted home USD 427.2 million (KSh 55.01 billion), up USD 72.9 million (KSh 9.4 billion) from August 2023. Inflows increased to USD 4.645 billion (KSh 593 billion) for the 12 months ending August 2024 from USD 4.120 billion (KSh 529 billion) during the same period in 2023. The 12.7% increase from the previous year underscores the growing optimism among Kenyans living outside about the economic future of their country. Significance of Kenya's diaspora remittance The unwavering bond between the diaspora and their families in their homeland is powerfully underscored by the consistent and escalating flow of remittances. These financial transfers are not merely private exchanges; they serve as a cornerstone for national development, injecting crucial capital into local economies, stimulating growth, and fostering entrepreneurial ventures. Furthermore, remittances play an indispensable role in bolstering a nation's foreign exchange reserves, providing a vital buffer against external economic shocks and supporting a stable currency. Currently, Kenya ranks high among African countries with the highest diaspora remittances. As Kenya navigates a complex landscape of economic possibilities and formidable challenges, the financial contributions from its diaspora remain an absolutely critical source of resilience. This ongoing support provides a safety net for countless families, enabling access to education, healthcare, and improved living conditions, thereby mitigating poverty and fostering social stability.
Business Insider
03-07-2025
- Business
- Business Insider
UK, US, South Sudan top list as Kenyan banks transport cash across borders
Kenyan commercial banks are increasingly transporting physical cash to foreign destinations, with the United Kingdom, United States, and South Sudan ranking as the top recipients. Kenyan commercial banks transport significant amounts of physical cash to foreign nations, with the UK and US among the top destinations. The UK accounted for 42% of cash shipments due to historical ties and established financial networks with Kenya. Prominent currencies transported include the US dollar, British pound, and euro, underscoring global financial connections. This trend was highlighted in the latest Survey on Cross-Border Movement of Cash, which revealed that 15 commercial banks representing 39.4% of all licensed banks in Kenya are engaged in cross-border cash shipments. The report, compiled by Kenyan financial authorities, underscores the scale and complexity of physical currency movements in and out of the country. According to the Central Bank of Kenya (CBK), the primary reasons Kenyan banks transport physical cash across borders include the repatriation of foreign currency and the need to ensure operational efficiency by meeting the liquidity demands of their foreign subsidiaries. In a report released on Wednesday, July 2, CBK noted that the main source of the transported cash is customer deposits held across local branches. Additional sources include group subsidiaries, currency exchange agencies, and central banks of other countries, highlighting the diverse financial networks involved in cross-border cash movements as per UK leads as top destination for Kenya's cash outflow According to the report, the United Kingdom emerged as the leading destination for physical cash outflows from Kenya, accounting for 42% of the total. The United States followed with 15%, Switzerland with 12%, and Germany with 4%. The UK's central role in hosting foreign accounts for Kenyan banks, businesses, and government institutions is closely tied to the deep and historic ties between the two nations. According to the UK Foreign, Commonwealth and Development Office, the UK was Kenya's fifth-largest export destination in 2022 and remains the largest international investor in the country, accounting for 14% of Kenya's total stock of foreign liabilities. These enduring trade, financial, and diplomatic ties help position the UK as a key hub for Kenyan foreign accounts and currency repatriation. Regionally, South Sudan accounted for 15% of physical cash shipments, while the Democratic Republic of Congo (DRC) received 8%. The most commonly transported currencies were the US dollar, euro, and British pound, reflecting the global nature of Kenya's financial networks and the liquidity needs of its banks abroad. While the United Kingdom topped the list of destinations for Kenya's physical cash exports, the US dollar was the most frequently moved currency. This highlights the dollar's dominance in international finance and the UK's pivotal role as a global financial hub facilitating multi-currency operations. Kenyan regulators have emphasized that all such operations are carried out under strict compliance frameworks, including anti-money laundering (AML) and know-your-customer (KYC) protocols.
Zawya
01-07-2025
- Business
- Zawya
Kenya's forex reserves hit an all-time high
Kenya's official foreign ex- change reserves held by the Central Bank of Kenya (CBK) have surged to a historic high of $10.1bn, buoyed by surplus funds remaining after international investors declined to fully participate in the govern- ment's $900m Eurobond buyback offer. Data released by the CBK reveals that the country's forex reserves rose by $913m in a single week in March, pushing the total above the $10bn mark for the first time in the nation's history. The reserves had stood at $9.1bn the previous week. The unexpected windfall comes after Kenya floated a new $1.5bn Eurobond in March, aimed at refinancing part of its 2024 debt obligations through a buyback of an older $2bn Eurobond initially issued in 2014. Out of the $900m the National Treasury had earmarked for the buy- back, investors only agreed to sell back 64.4% – amounting to $579.6m – leaving the government with an unplanned balance. Initially, the Treasury had expected to retain only $597m after the buy- back. The higher-than-anticipated balance is now sitting in the CBK reserves and, according to Treasury officials, will be used to settle upcom- ing syndicated loan obligations falling due in April. With the latest reserve boost, Kenya's forex cushion now represents 5.1 months of import cover, significantly above both the Central Bank's internal minimum threshold of four months and the East African Community's statutory require- ment of 4.5 months. This marks a dramatic turnaround from 2023, when the CBK's foreign reserves came under considerable strain. During that period, the apex bank frequently in- tervened in the currency markets, offload- ing dollars from its reserves to contain extreme volatility in the exchange rate, which had been driven by global economic pressures and rising demand for foreign currency to service external debts. Analysts say the sharp rise in reserves could ease short-term pressure on the Kenyan shilling and help rebuild inves- tor confidence, especially as the country navigates a difficult fiscal environment marked by high debt servicing costs and growing current account deficits. Tanzania's ATM transactions down while digital surges The total value of transactions conduct- ed through Automated Teller Machines (ATMs) in Tanzania fell slightly in 2024, reflecting a steady shift by consumers and businesses towards more convenient and cost-effective digital payment channels. According to the Bank of Tanzania's (BoT) National Payment Systems Annual Re- port for 2024, ATM transactions dropped by 0.77% to $5.1bn, down from the $5.2bn recorded in 2023. The volume of ATM transactions also fell by 5.63% to 70.8m, from 75.01m the previous year. This decline occurred despite a notable increase in the number of ATMs installed across the country. The total number of machines rose by 9.74% to 2,174 in 2024, compared to 1,981 the year before. The report notes that ATMs remain heavily concentrated in urban centres, with Dar es Salaam accounting for the largest share at 33.07%, followed by Aru- sha (7.13%), Mwanza (6.07%), and Dodoma (5.57%). BoT attributed the overall decline in ATM usage to the growing adoption of alternative digital payment methods, in- cluding mobile money platforms, vir-tual cards, and internet banking services, which offer more flexibility and reduced transaction costs. As of 2024, the number of payment cards issued in Tanzania reached 12.72m. Debit cards accounted for the vast major- ity at 97.05%, followed by prepaid cards (2.79%) and credit cards (0.16%). Visa, MasterCard, and UnionPay remained the leading card brands in circulation, along- side other international networks such as American Express, Cirrus, and Maestro. The number of local brand cards is- sued fell by 27.92% – from 2.40m in 2023 to 1.73m in 2024. This trend was largely driven by several factors, including growing demand for cross-border transactions, the rapid expansion of e-commerce, increased digitisation of merchant payments, and the inherent limitations of local cards and mobile money systems in handling interna- tional payments. Financial institutions and mobile network operators have ramped up the issuance of virtual prepaid cards, which allow users to fund transac- tions via their mobile money wallets. In 2024, virtual card registrations rose sharply by 60.37%, reaching 820,832 – up from 511,826 the previous year. These virtual cards processed a to- tal of 4.51m transactions in 2024. Of these, transactions denominated in Tanzanian shillings were valued at $220.15m, while USD-denominated transactions totalled 0.6m in volume, valued at $187.33m. Tanzania's remittance inflows grow by 35% Remittance inflows into Tanzania surged by 34.6% in 2024, reaching approximately $70m, as the government implemented policies to streamline and reduce the cost of sending money through formal finan- cial channels. According to the 2024 Annual Report on National Payment Systems released by the Bank of Tanzania (BoT) recently, the number of inbound remittance transac- tions rose by 40.5%, totalling 1.3m. 'The increase in remittances is partly due to policy measures that reduce trans-action costs, enhance inclusivity, and make it easier for the diaspora to send money through formal channels,' the central bank stated in the report. Outward remittances also grew. The number of transactions increased by 16.33%, while their value climbed 14.39%, to 148,274 transactions worth about $430m. Overall, Tanzania registered a positive net remittance position, record- ing 1.2m inbound transactions with a total value of around $271m more than out- bound flows, with the majority of funds coming from Tanzanians living in the United States, UK, and Canada. The report credited the increase to greater collaboration between local fi- nancial institutions and global Money Transfer Operators (MTOs) and remittance hubs, which enhanced accessibility and affordability. Electronic Money Institutions (EMIs) facilitated incoming remittances that showed a mixed trend. While the num- ber of transactions declined by 4.23% to 3.4m, the value increased by 8.60% to roughly $393m, pointing to a shift toward higher-value transactions. Cross-border payments via the SWIFT system also recorded signifi- cant growth. Inbound transactions jumped 33.85% to 298,580, while the value rose 35.61% to approximately $12.14bn, up from $8.95bn in 2023. Outgoing SWIFT transactions grew even faster – up 73.70% in volume to 310,622 transactions. Their total value almost doubled, increasing by 86.52% to about $43.07m, driven largely by growth in cross-border trade and the import and export of goods and services. In the regional context, EMIs played a key role in supporting cross- border payments within the East African Community (EAC) and Southern African Development Community (SADC). Incom- ing regional transactions rose 45.48% in volume and 43.40% in value, reaching 4.32m transactions worth roughly $194m. Outgoing regional transactions also in- creased, up 38.68% in volume to 2.21m and 31.99% in value to approximately $126m. People's Bank of Zanzibar sukuk bond finds favour The People's Bank of Zanzibar (PBZ) is calling on Tanzanians to invest in its newly launched bond product, the Zan- zibar Sukuk, positioning it as a tool for individual empowerment and national development. A sukuk bond is an Islamic financial instrument structured in a way that com-plies with Islamic law (shariah), and in- stead of paying interest like conventional bonds, sukuk investors receive a share of the profits generated by the underlying asset they own. PBZ Managing Director Arafat Haji highlighted the advantages of the bond, noting that the initiative stems from the vision of Zanzibar's government, led by President Dr Hussein Ali Mwinyi, to mo- bilise domestic investment for key devel- opment projects. The Zanzibar Sukuk offers a competi- tive annual profit rate of 10.5% in Tan- zanian shillings and 4.2% in US dollars, making it an attractive option for both local and diaspora investors. 'The purpose of this bond is to raise funds for key de- velopment projects in Zanzibar, including laboratories, airports, ports, and other infrastructure projects,' he stated. He added that profit payments will be disbursed every six months, and upon the bond's maturity after seven years, inves- tors will receive 100% of their original investment plus cumulative profits. The bond also offers flexibility: inves- tors can use their bond certificates as col- lateral to access loans from other financial institutions, unlocking opportunities for personal or business ventures. Dar es Salaam Mayor, Omary Kumbila- moto echoed these sentiments, connecting the bond to broader economic progress under President Samia Suluhu Hassan, who he said is working to ensure Dar es Salaam functions as a 24-hour economy. Stiff task ahead for Bank of Uganda's new governor The appointment of Dr Michael Atingi- Ego as the new Governor of the Bank of Uganda and Prof Augustus Nuwagaba as his Deputy comes at a critical moment for Uganda's financial sector. While they bring sterling academic and professional credentials to the top office, they inherit an institution under intense scrutiny – not only for its internal gov- ernance but also for its role in ensuring economic stability amidst a volatile global environment. When the two new leaders stepped into office, the central bank was still grappling with the fallout from a major financial scandal. In September 2024, the Bank of Uganda made two erroneous transfers – one of $6.134m meant for the World Bank and another of $8.596m meant for the African Development Fund. The funds were instead wired to private companies: Roadway Company Limited via MUFG Bank in Japan, and MJS International in London, respectively. The gravity of the situation quickly became apparent. Once the bank real- ised the payments had not reached the intended recipients, it launched inter-nal investigations and reported the incidents to the Uganda Police Force and the Financial Intelligence Au- thority. Swift action followed. Working through its correspondent bank, Citibank N.A., the Bank of Uganda successfully recovered $8.205m from the MJS International transaction, which has since been credited to the Consolidated Fund Account. Efforts to recover the remaining $391,660.45 are ongoing. As Dr Atingi-Ego and Prof Nu- wagaba take the reins, one of their immediate tasks is to restore public confidence in the central bank's in- tegrity. This involves not only investigat- ing past mishandlings but also improving verification processes for all future high- value transactions. The new leadership faces broader structural issues that continue to plague Uganda's financial landscape. High inter- est rates remain a persistent complaint from borrowers across the country. Meanwhile, Uganda's financial markets must navigate an increasingly unpredict- able global environment. With between 12 to 15% of Uganda's domestic debt held by non-resident investors, geopolitical shocks and global financial instabilities present significant risks. On a regional level, the central bank is also expected to take a lead role in fast-tracking the East African Monetary Union by harmonising financial markets across the region. © Copyright IC Publications 2022 Provided by SyndiGate Media Inc. (
Coin Geek
16-06-2025
- Business
- Coin Geek
1 in 3 Kenyan banks ready to venture to digital assets: report
Getting your Trinity Audio player ready... A few years ago, digital asset traders in Kenya couldn't get a bank to open accounts for them and had to resort to mobile money, whose daily transaction limits are much lower. Now, one in three banks is ready to venture into digital assets, according to a new report by the country's central bank. In its 2024 Innovation Survey, the Central Bank of Kenya (CBK) revealed that '31 percent of the respondents indicated that they were highly likely to undertake activities in the area of virtual assets,' including digital currencies like BSV, non-fungible tokens (NFTs), and other digital tokens. Kenya has been one of the global leaders in adoption, ranking first globally for peer-to-peer digital asset transaction volume in 2020 and 2021. It has also ranked highly for overall adoption every year since, with South Africa and Nigeria the only African countries with more users. However, like in most African nations, the banking industry has steered clear of the sector. For years, most Kenyan banks denied service to VASPs and any individual whose account was linked to digital asset platforms. In some cases, they shut down accounts they believed to be dealing in 'crypto.' Times have changed, and with adoption skyrocketing, the lenders are now warming up to the sector, CBK revealed. 'Financial institutions indicated their interest in virtual assets, noting the potential opportunities of virtual assets in enhancing financial access to the unbanked by providing alternative payment and investment channels, improving transaction speed, and reducing transaction costs,' the report noted. In 2022, the United Nations Conference on Trade and Development (UNCTAD) estimated that four million Kenyans owned digital assets. Other more recent reports put this number at over six million, which accounts for over 10% of the population. The country's tax agency chair has stated that in the financial year 2022, the total digital asset market turnover hit Kshs. 2.4 trillion ($19 billion). While the banks have warmed up to digital assets, they are wary of associated risks 'such as challenges in enforcing Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) controls, cybersecurity risks, fraud, and high volatility among others,' the CBK report stated. Kenya still lacks a comprehensive regulatory framework for the digital asset sector, which limits the involvement of highly regulated entities such as banks. Like most jurisdictions, authorities have had to apply general fintech laws to the sector. However, the nuances of digital assets, such as their decentralized nature or high volatility, hinder this application. This could change soon. Legislators are weighing a new bill to legalize digital assets and set guardrails to protect investors. However, the digital asset sector is fighting to have some sections amended, such as a 1.5% digital asset tax on each transaction before the bill passes. Beyond the banks, the innovation survey also noted that stablecoins' prominence in the East African nation has been steadily rising, especially in cross-border payments. Uber weighs digital asset payments Elsewhere, ride-hailing giant Uber (NASDAQ: UBER) is once again considering integrating digital asset payments, CEO Dara Khosrowshahi has revealed. Speaking at a tech conference, Khosrowshahi said the company is in the 'study phase,' but leaning more toward stablecoins. 'I think stablecoins are one of the more interesting instantiations of crypto that have a practical benefit beyond being a store of value,' he stated at the Bloomberg Tech Summit in San Francisco. 'Stablecoins seem quite promising, especially for global companies moving money around internationally. That's super interesting to us, and we're definitely going to take a look.' It's not the first time Uber has claimed to be exploring digital assets. In 2021, Khosrowshahi stated that the company was weighing digital asset payments but would not follow Tesla (NASDAQ: TSLA) into purchasing BTC on its balance sheet. However, nothing came of this pledge. Uber was also a member of Meta's (NASDAQ: META) ill-fated Libra-cum-Diem stablecoin project, which Mark Zuckerberg abandoned in 2022 after being frustrated by regulators globally. Whether Uber follows up on its recent stablecoin pledge remains to be seen. Meanwhile, dozens of other giants in finance, tech, and beyond are scrambling to integrate stablecoins into their businesses or launch new stablecoins themselves. Among those looking to challenge incumbents like Tether and the recently publicly listed Circle (NASDAQ: CRCL) is a conglomerate of the top U.S. banks. Led by JPMorgan (NASDAQ: JPM) and Citi (NASDAQ: C), the banks reportedly met a week ago to discuss a joint effort to launch a unified stablecoin. In Europe, Germany's largest lender, Deutsche Bank (NASDAQ: DB), is also exploring whether it should issue its stablecoin or launch a joint initiative with other top banks. Watch: Tech redefines how things are done—Africa is here for it title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Reuters
11-06-2025
- Business
- Reuters
Kenya central bank lowers 2026 growth forecast to 5.4%
NAIROBI, June 11 (Reuters) - Kenya's central bank has lowered its 2026 economic growth forecast to 5.4% from a 5.6% forecast given in April, its governor Kamau Thugge said on Wednesday. On Tuesday the Central Bank of Kenya reduced its 2025 growth forecast to 5.2% from 5.4% as it cut its benchmark lending rate (KECBIR=ECI), opens new tab for the sixth meeting in a row, saying it wanted to provide further support to the economy. The Central Bank Rate was lowered by 25 basis points (bps) to 9.75%, whereas its previous cut was by a larger 75 bps.
