However, the impact of the global crisis on Kenya’s exports may come from reduced aid flows to regional trading partners. •  Remittances: Remittance receipts through formal channels increased from US dollars574 million in 2007 to US dollars630 million in 2008 despite reductions beginning May 2008. The decline could persist with reduction in incomes in source countries.
Remittances are predominantly used for smoothing consumption and for investment in real estate. But they are also pro-cyclical and tend to follow events in the economy. So their trend may not reveal much. •  Liquidity risks: While global banks are not lending to each other, local banks are. However, Government access to global financial markets may be constrained by weakening of these markets.