Kenya: Rich Kenyans Shift Sh34 Billion in Fixed Deposits Over Two Months

Wealthy Kenyans and companies stockpiled a record Sh33.8 billion in two months in fixed bank deposits in the wake of withdrawals from dollar-based accounts and search for safety for their savings.

Central Bank of Kenya (CBK) data shows that fixed bank deposits held by Kenyans hit a historic high of Sh1.567 trillion in May, up from Sh1.533 trillion in March.

Deposits in foreign currency bank deposits–which jumped at the peak of the Covid-19 pandemic–dropped by Sh34.6 billion, suggesting the rich were shifting their savings to the local currency fixed accounts that are currently paying an average return of 6.3 percent.

Analysts say the switch was triggered by the strengthening of the shilling against the dollar, which has reduced the appetite to put money in foreign currency with the hope earning both bank interest and capital gains.

The savings in fixed accounts, which have increased by Sh165 billion since the onset of Covid-19 in Kenya in March last year, is an indication that the wealthy are protecting their value and hedging rather than seeking new areas in which to invest their fortunes amid the economic fallout from the pandemic.

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