Regulatory Alerts2023-08-29
Banking Circular No 7 of 2023 - Changes to Operations in the Interbank Foreign Exchange Market
The Central Bank of Kenya announces changes in operations for the foreign exchange interbank market, effective immediately. These alterations include a tenor limit of 6 months or more on swaps involving non-resident banks; unrestricted tenors for swaps between residents (including within the East African Community); permission to use electronic brokerage systems; and a reduced minimum trade amount in the interbank market from USD 500,000 to USD 250,000. These updates aim to streamline and improve operations within the market.
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