Kenyans deposited KSh 45 billion during 3-month partial lockdown

– Deposits into foreign currency accounts operated by wealthy Kenyans and local firms grew from KSh 625.9 billion in February to KSh 671.4 billion in May

– The trend shows depositors were hedging their money from losses and market volatility occasioned by the poorly performing shilling

– Easing of restrictions both locally and in Kenya’s export markets like Europe is expected to help the shilling recover from market shocks caused by the COVID-19 pandemic

Foreign currency accounts belonging to Kenyans and local firms grew by KSh 45.5 billion between February and May 2020, data from Central Bank of Kenya (CBK) shows.

The deposits increased the cumulative amount of money held in foreign currency accounts in Kenya from KSh 625.9 recorded in February 2020 to KSh 671.4 billion in May.

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The government expects the economy will grow by less than 2.5% as a result of the pandemic. Before the disease struck, the state had envisioned about 6% growth. Photo: CBK.
Source: UGC

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The growth was realised at a time when the government had imposed tough regulations to contain the spread of COVID-19 pandemic which has resulted in an unprecedented economic downturn.

According to the trend, the wealthy decided to bank their money in foreign currency to gain interest rather than pump it in the volatile economy.

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Among factors that might have caused the wealthy to abstain from investing their money was poor performance of the shilling against the dollar which has remained resilient.

The shilling was weakened further by the dwindling performance of both global and local commerce.

President Uhuru Kenyatta reviewed curfew hours and lifted cessation of movement order to help the economy recover from COVID-19 shock. Photo: State House Kenya.
Source: Facebook

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Travel restriction issued locally and in Europen countries resulted in plummeting exports which play an integral role in stabilising the shilling against the dollar.

Easing of restrictions both locally and in Kenya’s export markets, for instance, Europe is expected to help the economy recover from the shock occasion by the global pandemic.

President Uhuru Kenyatta reviewed the 7pm to 5am curfew to 9pm to 4am in a move to allow local firms and businesses to have full working shifts.

On Monday, July 6, Uhuru lifted the cessation of movement order that had restricted movement into and out of the expanded Nairobi Metropolitan Area and the counties of Mombasa and Mandera.

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