Funguo Consultants

The New Kenyan Forex Currency Code – And How You’ll Benefit

This morning, the Central Bank of Kenya launched a regulation that will compel commercial bankers to release dollars into the market for trade, and rein in on brokers who are perpetuating the black forex market.

This regulation, based on the FX global Code, will increase the CBK’s regulation in the forex market in Kenya, and promote positive, best practices in the Kenyan market. This regulation comes at a time when the Kenyan shilling depreciated by about 15% against the greenback. Kenya pursues a flexible exchange rate regime, and the value of the Kenya Shilling is determined by the market according to the demand and supply of foreign exchange.

https://tradingeconomics.com/usdkes:cur

Key notes about the Kenya Foreign Exchange Code

1. It is based on 6 principles:
   • Ethics
   • Governance
   • Execution
   • Information sharing
   • Risk management & compliance
   • Confirmation and Settlement Processes
2. It targets market participants who deal in wholesale trade of foreign currencies in Kenya. In this case, this regulation targets commercial banks in Kenya.
3. It takes effect today (23rd March 2023) morning.
4. Market participants are expected to demonstrate compliance with this regulation by issuing quarterly reports to the CBK within 14 days from the end of every calendar quarter of the year. The first report should be on 14th July 2023, and
5. Non-compliance with this regulation and violations will attract monetary fines from the CBK

How you will benefit from this regulation

• Increased supply of dollars and other currencies in the forex market.
• Increased fairness, transparency, openness, liquidity and competitiveness of the forex market in Kenya.
• It will facilitate better functioning of the market, reinforcing Kenya’s flexible exchange rate regime for greater resilience of the economy.

Now, dear investors, this is the best time to invest in the Kenyan foreign exchange market!