Government limits the sale of US dollars in Kenya by remittance companies
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The government Central Bank limits the sale of US dollars in Kenya by money remittance companies to $100,000 per day
The government Central Bank limits the sale of US dollars in Kenya by money remittance companies to $100,000 per day.
The Central Bank of Kenya has capped the amount of dollars that money transfer companies can sell to an individual customer at $100,000 per day.
This was revealed in a central bank letter dated Wednesday to the money remittance companies.
The firms, which provide cash remittance services to those living abroad, will be required to sell any hard currency amounts exceeding $100,000 only to commercial banks, the regulator said.
The move was caused by an observation that the firms have been participating in the wholesale foreign exchange market without complying with the various guidelines, standards, and codes that govern that segment, the central bank said.
The move will create a fair and orderly market, the bank said. The Kenyan shilling has been under sustained pressure from the dollar for more than a year.
Individuals running big businesses will now be forced to go through banks to raise dollars and not money remittance firms, which could affect some of their operations.
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There are around 11 money remittance companies licensed by CBK to operate in Kenya.
The companies provide remittance services to those living abroad who send money back home.
According to data from CBK, diaspora remittances increased in March 2023 to Ksh48.1 billion from Ksh41.7 billion.
Remittance is one of the major sources of dollars for the country, growing faster in recent years compared to neighbouring countries.
The opportunities in the sector as Kenya’s diaspora population grows have seen the emergence of money remittance services with operations across different continents.
Regulating the sale of the dollar also comes at a time when the local currency has been declining due to increased demand from manufacturers and inflation.
According to CBK indicative rates for Thursday, September 14, the dollar is selling at Ksh146.76.
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