CBK whips banks to unlock dollars after President Ruto warning
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Loading... - Stephen Mugo
- 23 Mar 2023
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The Central Bank of Kenya (CBK) has spooked banks with a new foreign exchange code that comes with threats of punitive fines and licence suspension for offenders, on a day President William Ruto warned traders hoarding dollars to expect losses in a few weeks.
The foreign exchange code, among others, prohibits banks from engaging in trading practices, quoting prices or making transactions with the intention of manipulating price movements or disrupting the functioning of the market.
The banking regulator says the code, which comes into effect this morning, will ‘ensure the integrity and effective functioning of the forex market in Kenya.’
“Market participants should not engage in trading strategies or quote prices with the intent of hindering market functioning or compromising market integrity. Such strategies include those that may cause undue latency, artificial price movements, or delays in other market participants’ transactions and result in a false impression of market price, depth, or liquidity,” says the code.
Banks will be required to immediately conduct a self-assessment and submit to the CBK a report on their level of compliance with the new code by April 30, 2023.
All banks will thereafter submit a detailed compliance implementation plan approved by their boards by June 30, 2023. Read More…
