Foreign Currency Bank Deposits: Sh. 45 billion! This is the amount of money that wealthy Kenyans stocked in banks over the three months in which Kenya instituted a corona semi lock down.
According to figures released from the Central Bank of Kenya (CBK), foreign currency bank deposits held by Kenyans jumped to Sh. 671.4 billion from Sh. 625.9 billion during the period.
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“The rise in foreign currency bank deposits emerged in a period when Kenya announced its first Covid-19 cases and imposed tough restrictions, including a dusk-to-dawn curfew. This is an indication that the wealthy are protecting their value and hedging rather than seeking new areas in which to invest their fortunes,” a related report that appeared in the Business Daily said.
It is notable that holding their billions in dollars will translate to higher value. This is because the shilling has slumped from the mark of Sh. 101.87 per US dollar that was recorded in February to Sh. 107.29 that was recorded on July 15. “We expect USD to strengthen on the back of better-than-expected May labour report. Furthermore, the unresolved US-China trade spat signals a RISK-ON sentiment on the world reserve currency,” Genghis Capital said in its weekly commentary.
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In the same vein, data from the CBK showed the total cash in circulation stood at Sh. 241.96 billion in February down from Sh. 265.87 billion in the same month last year.