Kenyans living abroad sent home a record Ksh58.15 billion (USD 450.3 million) in March 2026, the highest single month ever recorded, surpassing the previous peak of USD 445.39 million set in December 2024, a month that historically draws higher volumes from festive season transfers.
The 9.1% jump from February’s Ksh53.31 billion marks a decisive turn after a slower start to the year, when January flows sat at Ksh52.65 billion. It also pushes Q1 2026 cumulative inflows to USD 1.27 billion, up 3.4% from USD 1.23 billion in the same period last year, and locks in remittances as Kenya’s single largest source of foreign exchange, outpacing tourism receipts and agricultural exports.
The milestone carries weight beyond the headline number. It lands at a moment when Kenya’s foreign exchange reserves are declining, the Middle East conflict is threatening Gulf corridor flows, and households across the country are absorbing sharply rising fuel costs.
North America Carries the Bulk, Europe Grows Steadily
The United States remains the engine of Kenya’s remittance story. The US accounted for 54.2% of total flows in 2025, with annual volumes reaching USD 2.73 billion. February corridor data shows the US contributing 50.4% of monthly inflows at USD 207.90 million, though that figure dipped 2.6% year on year, a sign of some softening in what remains an otherwise dominant corridor.
The UK contributed USD 34.17 million in February, up 7.6% year on year, cementing its position as the second largest single-country source after the US. Australia, often absent from remittance discussions, recorded USD 20.35 million in February, a figure larger than the entire Saudi Arabia corridor and one that continues to grow.
The 12-month cumulative total for the period ending March 2026 reached Ksh655.9 billion (USD 5.08 billion), a 2.2% rise compared to the same period in 2025, according to CBK data.
Saudi Arabia Retreats, UAE Steps In
The Gulf corridor tells a more complicated story. Saudi Arabia, which grew rapidly as a remittance source in recent years, recorded USD 14.45 million in February, a 12.9% decline year on year. That follows a 25.06% collapse in full-year 2025 Saudi flows, which fell to USD 302.1 million from USD 403.12 million in 2024.
Two factors drove the drop. Saudi Arabia introduced a 15% VAT on money transfer transactions and, from June 2025, replaced its decades-old work permit system with a skill-based framework that grouped foreign workers into three categories — highly skilled, skilled, and basic — disrupting wages, contract renewals, and onboarding schedules for thousands of Kenyan workers.
The UAE is absorbing part of that shortfall. UAE flows climbed 24.4% year on year to USD 15.77 million in February, overtaking Saudi Arabia as the larger Gulf corridor. The shift suggests Kenyan migrant placement is quietly rebalancing within the region rather than retreating from it entirely.
The combined Gulf exposure, covering Saudi Arabia, the UAE, Qatar, Bahrain, and Oman, stood at USD 37.47 million or 9.1% of February flows.
The Iran Conflict Introduces a New Layer of Risk
The US and Israel launched military operations against Iran on 28 February 2026. The CBK moved quickly to assess the implications for Kenya’s external position.
Governor Kamau Thugge said the war is now threatening flows from the Gulf, which accounts for about 10% of Kenya’s annual remittance inflows, and flagged potential indirect effects arising from possible economic growth slowdown in other countries, including the United States.
In response, the CBK revised its full-year 2026 remittance forecast down to USD 5.1 billion, representing a 1.4% increase on 2025’s USD 5.04 billion. Earlier in the year, the CBK had projected growth of 6%, targeting USD 5.42 billion.
A report by the Institute of Economic Affairs quantified the downside exposure more precisely. In January 2026, Gulf remittances to Kenya totalled approximately USD 40 million, covering Saudi Arabia, the UAE, Qatar, Bahrain, Oman, and Iraq. The report warned that were the conflict to disrupt banking systems, halt operations, or damage telecommunications infrastructure, those flows could slow materially or stop altogether.
“In the case that remittance inflows collapsed, USD 40 million in monthly remittances from the Gulf would be at risk,” the report noted, equivalent to roughly USD 480 million annually.
Governor Thugge has said he expects the Saudi slowdown to reverse once the market adjusts fully to the new permit framework, projecting 4% growth in 2026 and 5% in 2027 from that corridor. Whether the conflict delays that recovery remains the central uncertainty.
Reserves Are Falling as Remittance Momentum Grows
The timing of the March record carries specific significance for Kenya’s balance of payments.
Foreign exchange reserves stood at Ksh1.718 trillion (USD 13,306 million) as of April 16, equivalent to 5.6 months of import cover, down from Ksh1.813 trillion on March 26 and Ksh1.845 trillion on March 18. The trajectory is gradual but consistent, and it places increasing weight on sustained diaspora inflows to cushion the external position.
Between early March and April 2, the CBK spent approximately USD 941 million in reserves defending the shilling after it briefly weakened past the 130-per-dollar mark during a global market selloff, before recovering to around 129.20.
The CBK’s statutory requirement calls for maintaining a minimum of four months of import cover, meaning the current buffer remains above the regulatory floor. But the month-on-month drawdown has made every dollar of diaspora inflow more consequential than it was a year ago.
The Kenyan shilling held broadly stable during the week ending April 16, exchanging at Ksh129.18 per US dollar, a marginal strengthening from Ksh129.53 recorded on April 9. The CBK has attributed part of that stability to consistent remittance momentum, which helps offset trade deficits and reduces pressure on the currency.
A Record That Raises Questions
With Q1 2026 at USD 1.27 billion, annualising the current run rate puts full-year inflows at approximately USD 5.1 billion, broadly in line with the revised CBK forecast. Any recovery in Saudi flows, or continued strength from North America and Europe through the second half, would bring the original USD 5.42 billion target back within reach.
The CBK has revised its current account deficit projection to 3% of GDP for 2026, up from 2.2%, reflecting higher oil import bills, softer remittance growth, and slower service receipts. That context reframes the March record from a moment of comfort to a marker of how much Kenya now depends on its diaspora to absorb economic shocks that originate far beyond its borders.
My chat with the Governor of the Central Bank of Kenya, Dr. Kamau Thugge, about the June 2026 Monetary Policy Committee meeting.
My question was:
· Does the fact that the emerging inflation & FX pressures are supply side driven constrain the extent to which tightening is a… https://t.co/1CWkn5ioTI pic.twitter.com/fbhniK5dWo
— Julians Amboko (@AmbokoJH) April 20, 2026
The dollars flowing from Washington, London, Dubai, and Sydney do not arrive as macroeconomic data. They arrive as school fees paid on time, rent covered for another month, and a family’s ability to manage a difficult year. At the aggregate level, they hold the shilling steady and keep the current account from widening further. The record was set in March. Sustaining it through the rest of 2026 is the harder task.
