Central Bank sets ceiling on foreign exchange rates
24 July 2015, 19:51
Nairobi - Kenya's central bank set the
minimum size for foreign exchange transactions on the interbank
market at $500,000 and asked banks to maintain a maximum spread
of 0.20 shillings ($0.0020) on quotes.
The bank said last week it was taking measures to eliminate
"disorderly market developments" after the shilling sank to new
3 1/2-year lows against the dollar, forcing policymakers to jack
up lending rates.
Earlier this week, it asked banks not to exceed the set
maximum exposure to foreign exchange of 10 percent of core
capital, at any time during the day.
The directive on exposure split traders on its likely
impact, with some saying it would curb their ability to handle
large transactions, others that it would not.
The latest measures on a minimum transaction and a maximum
spread were contained in a circular to commercial banks dated
July 23 and seen by Reuters on Friday.
One trader said setting the minimum size at $500,000 might
constrain smaller banks from taking positions.
Policymakers will meet on Aug. 5 to set rates, a month ahead
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