I&M resumes online trading of pound, euro after volatility eases

The I&M Bank building in Nairobi. Capital. PHOTO | FILE  

By SANDRA CHAO-BLASTO

In Summary

• Appreciation of the shilling relative to the pound has been good news to importers but exporters of fruit and vegetable to the British and European markets have experienced currency losses eating into their margins.
• “We have always given our clients competitive rates with the foreign currency transactions and now that the pound and euro seemed to have stabilised we can offer them to clients,” he said

I&M has resumed trading of the sterling pound and euro on its online transactions after the currencies stabilised in the local market.

The two currencies were exposed to volatility following the vote for the United Kingdom’s to exit the European Union.

“As a follow up to our previous communication regarding foreign currency transactions, we are pleased to inform you that we have resumed foreign currency transactions through our digital channels (I&M Mobile and I-Click Internet banking). In addition to GBP and EUR, other foreign currency transactions continue to be available,” said the bank in a statement sent out to customers.

Soon after the Brexit vote the pound slumped to 31-year low of 1.2796 against the greenback. The euro also depreciated even though not as much as the sterling pound.

Speaking to the Business daily Mr Suprio Sengupta, general manager marketing and product development at I&M Bank, said the lender stopped the online transactions due to the high volatility.

READ: I&M suspends online pound trade as currency drops 11pc

“The two currencies were fluctuating so much that it was not possible to offer our mobile and Internet banking customers a standard rate on the 24-hour service, especially after market hours,” he said.

Been good news

During periods of wide swings the rates offered on the Internet may lag actual happenings causing losses to a bank customer buying or selling the currency.

Appreciation of the shilling relative to the pound has been good news to importers but exporters of fruit and vegetable to the British and European markets have experienced currency losses eating into their margins.

In the two weeks since the UK voted to leave the EU, the NSE 20 Share Index declined by 3.4 per cent though the full economic impact is yet to be felt.
At the moment the pound is trading at an exchange rate of 133 units while the euro is trading at 113.

I&M had early July suspended the trading of the two currencies on their digital channels waiting for volatility in the global currency markets to abate.
The two currencies were, however, available for trading within the banking halls.

“We have always given our clients competitive rates with the foreign currency transactions and now that the pound and euro seemed to have stabilised we can offer them to clients,” he said

In October last year the bank discontinued its debit and credit card backed e-commerce transactions  following a massive increase in online fraud. The lender  resumed the card payments after upgrading its systems to safeguard customers.

Once the exit of the United Kingdom — estimated to take two years — is complete Kenya will have to renegotiate most of the trade agreements it had with its former colonial master.