On 22 March 2023, the Central Bank of Kenya (CBK) issued the Kenya Foreign Exchange Code (the FX Code) that outlines the standards for commercial banks and seeks to strengthen and promote the integrity and effective functioning of the wholesale (Interbank) foreign exchange (FX) market. The Code, that draws from the Global Foreign Exchange Code (Global Code) and customized to the Kenyan context, reinforces six principles ranging from ethics and professionalism; governance; execution of transactions; risk management and compliance; information sharing; to confirmation and settlement processes.
The banking industry welcomes the issuance of this Code and commends the CBK for steering the market to strongly align to global best practices and stabilise the foreign exchange market. The implementation of this Code is expected to restore trust and enhance the functioning of the foreign exchange market, support the country’s flexible exchange rate regime in keeping with its true price discovery principle, and deliver other attendant benefits to the overall economy.
Going forward, the industry will implement the Code, and continue its regular engagements with the Central Bank of Kenya and other market players to ensure that the foreign exchange market is functioning and promoting best practices to the benefit of our customers and the economy at large.
John Gachora, MBS
Chairman
Kenya Bankers Association
About the Kenya Bankers Association:
KBA (www.kba.co.ke) was founded on 16th July 1962. Today, KBA is the financial sector’s leading advocacy group and banking industry umbrella body that represents total assets in excess of USD 60 billion. KBA has evolved and broadened its function to include advocacy on behalf of the banking industry and championing financial sector development through strategic projects such as the launch of the industry’s first P2P digital payments platform PesaLink. In line with the Government’s policy on public-private partnerships, KBA and Central Bank of Kenya have implemented key projects such as modernization of the National Payments System through the Automated Clearing House, implementing the Real Time Gross Settlement System (RTGS), and the Kenya Credit Information Sharing Initiative. The KBA members are comprised of commercial banks and deposit taking microfinance banks. For more information, visit www.kba.co.ke.
