Fixed Bank Deposits: Rich Kenyans saved Sh. 1.03 billion daily in fixed bank deposits in July 2021. These savings came as wealthy Kenyans and companies sought safe investment vehicles amidst economic recovery.
According to data from the Central Bank of Kenya, fixed bank deposits increased to a record high of Sh. 1.598 trillion in the month of July. This was an increase from the Sh. 1.567 trillion that was saved in the month of June. The increase of Sh. 30.85 billion cash increase in fixed accounts, equivalent to Sh. 1.03 billion daily.
Data from the Central Bank of Kenya further showed that Kenyans saved Sh. 33.8 billion between May and March 2021, pushing the amount saved in fixed deposit accounts to a high of Sh. 1.567 trillion in May, up from Sh. 1.533 trillion in March. In contrast, deposits in dollar based accounts fell by Sh. 34.6 billion between this period. “The decline in dollar deposits shows more confidence in the underlying strength of the Kenya shilling, especially due to the recent financing deal with the IMF,” Ronak Gadhia, the director Sub-Saharan Banks at EFG Hermes, said.
“The expected external inflows that were due beginning April and throughout the end of the second quarter were seen bolstering the shilling and depositors who anticipated this strengthening of the Shilling reduced their US dollar holdings,” Churchill Ogutu, the head of research at Genghis Capital said.
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The shilling started strengthening in April this year. This came as the market benefited from inflows that came from the government’s successful application for new debt financing from the International Monetary Fund. In April, Kenya secured $2.34 billion financing from the IMF.