The Central Bank of Kenya (CBK) has limited the sale of dollars to individuals through money transfer companies.
Reuters reported on Thursday that money remittance companies will not be allowed by CBK to sell $100,000 per day to any individual.
The new guidelines will only allow the firms to sell the amounts above the threshold to commercial banks.
CBK noted in a statement that it was forced to act after it emerged that remittance companies are participating in wholesale forex exchange without following set guidelines standards and codes that govern the sector.
There are around 11 money remittance companies licenced by CBK to operate in Kenya.
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.
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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