Regulatory Alerts2023-08-29 | 1994373053Banking Circular No 7 of 2023 - Changes to Operations in the Interbank Foreign Exchange Market
The Central Bank of Kenya has announced changes to streamline the interbank foreign exchange market, including revised limits on swap tenors, permitting electronic brokerage systems, and lowering the minimum trading amount to USD 250,000. These changes are effective immediately and aim to improve the market's efficiency. The circular communicating these updates was addressed to the chief executive officers of all commercial banks in Kenya.
KUU YA KENYA AUGUST 29, 2023 Haile Selassie Avenue P.O. Box 60000 - 00200 Nairobi, Kenya Telephone: 2860000, Fax: 340192 BANKING CIRCULAR NO. 7 OF 2023 TO: ALL CHIEF EXECUTIVE OFFICERS OF COMMERCIAL BANKS
Changes To Operations In The Interbank Foreign Exchange Market
In order to streamline and improve operations in the foreign exchange interbank market, the Central Bank of Kenya hereby announces the following changes: l. Limits on tenor for swaps are reviewed as follows: The tenor of swaps and Kenya shilling borrowing where non-resident banks are involved i.
is now limited to a tenor of not less than 6 months.
ii.
There is no limit to the tenor of swaps between residents. This includes residents within the East Africa Community.
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Use of Electronic Brokerage Systems is permitted.
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Minimum amount that can be traded in the interbank market has been reviewed from USD 500,000 to USD 250,000.
These changes take effect immediately.
DAVID LUUSA DIRECTOR, FINANCIAL MARKETS DEPARTMENT