Foreign currency deposits also rose from Sh553.2 billion to Sh625.3 billion in the period under review. FILE PHOTO Long-term and fixed deposits associated with the wealthy, money market funds and cash-rich corporates rose from Sh1.11 trillion in October 2017, reflecting a growth of 27 percent.
Foreign currency deposits also rose from Sh553.2 billion to Sh625.3 billion in the period under review.
This indicates that the wealthy are protecting their value and hedging against the local currency over investing their fortunes.
Corporates and wealthy individuals are sitting on a cash pile worth Sh1.41 trillion in a soft economy where investment options are becoming limited.
Central Bank of Kenya (CBK) data shows that long-term and fixed deposits associated with the wealthy, money market funds and cash-rich corporates rose from Sh1.11 trillion in October 2017, reflecting a growth of 27 percent.
Foreign currency deposits also rose from Sh553.2 billion to Sh625.3 billion in the period under review, an indication that the wealthy are protecting their value and hedging against the local currency over investing their fortunes.
The revelation comes in the backdrop of data showing that the cash in Kenyans’ pockets dropped to a six-year low in September. CBK data shows that cash in circulation outside banks stood at Sh227 billion in October, down from Sh269 billion in the same month last year.
Analysts say high-net worth investors and companies with billions of shillings in fixed accounts have opted not to invest in expanding their businesses or starting new ventures, citing lower sales and returns.
This ultimately had the effect of reducing the amount of money in people’s pockets and cutting circulation of cash outside banks and short-term deposits.
Low returns from a bearish stock market and a slump in real estate has seen the rich opt to keep cash in banks and tap from interest returns that stood at 6.98 percent in September. While companies see the money in banks as a buffer against hard times, it has long riled investors, who say executives should invest it for growth or return it to shareholders. However, with reduced demand, most have preferred to keep cash in banks with money in fixed deposits now equivalent to what the Kenya Revenue Authority (KRA) collects annually from taxes.
A monthly survey that tracks business output in manufacturing and services sectors revealed that new orders that Kenyan companies received during the month expanded at the slowest rate in six months.“The future output sub-index […]
