The Central Bank of Kenya in Nairobi.
What you need to know:
- Bank treasuries show that lenders are selling dollars at between Sh113 and Sh116 apiece while Central Bank of Kenya places it at an average of Sh111.1
Cooperative Bank, for instance, was buying at 107.2 and selling at 114.2 an average of 110.7, which is lower than the market rate, while KCB was buying at 102.9 and selling at 113.6 an average of 108.25.
Efforts to shield the shilling from weakening on the official exchange rate has created a dollar black market where banks display one price on their boards but sell at a higher price.
Bank treasuries show that lenders are selling dollars at between Sh113 and Sh116 apiece while Central Bank of Kenya (CBK) places it at an average of Sh111.1
A spot check by the Saturday Nation yesterday showed that lenders were showing lower prices giving an impression that they were trading at a loss.
An analysis by Standard Bank’s Head of Africa Research Jibran Qureishi said the market was quoting different exchange rates because of fear of reprisal from CBK and warned of a risk of development of a dollar black market.
He explained why confusion has hit banks over the shilling’s exchange rate against the dollar, with lenders now buying and selling well above the printed official rate when buying hard currency from one another.
Stanbic Bank
Later Stanbic Bank disowned the analysis. “The contents of that report do not reflect the position of Stanbic Bank Kenya limited. The note was authored by Mr Jibran Qureshi of the Standard Bank Africa Research unit, which is the independent arm of Standard bank Group of South Africa,” Stanbic Bank boss Charles Mudiwa said in a statement.
Cooperative Bank, for instance, was buying at 107.2 and selling at 114.2 an average of 110.7, which is lower than the market rate, while KCB was buying at 102.9 and selling at 113.6 an average of 108.25.
The Saturday Nation has also learnt that CBK summoned top manufacturers who had been complaining of difficulties in getting dollars but details of the closed-door meeting on Tuesday evening are scant, as none of those who attended was willing to talk to us.
Tension and pressure from multilateral partners forced CBK to meet bankers on Thursday where they agreed to work together to solve the crisis.
Banks will be allowed to price the shilling realistically and show each other the same rate and maintain records of these engagements.
They will also discourage customers from buying dollars now for fear that the shilling will depreciate further as a risk hedging move. CBK will provide dollars to support the market and will not punish banks for trades that are already locked in.
Shilling weakened
“The Kenyan shilling weakened against the dollar on Thursday, prompting the CBK to pump in dollars and stabilise it, traders said, adding a row over the emergence of dual exchange rates had been resolved,” Reuters said.
In a bid to stem slide of the shilling Dr Patrick Njoroge has previously clamped down on currency dealers from commenting about the units.
He then went after analysts who spoke to the media and reined in international media that extensively reported about the currency.
Central Bank's crackdown on forex market actors has now gone a notch higher as anxiety over increase in debt on depreciation of Kenyan shilling swept in the financial markets this week.
dguguyu@ke.nationamedia.com
No comments :
Post a Comment