Kenya’s central bank has made amendments to the laws governing the physical transfer of Foreign currency, the move means that individuals operating or linked to a bureau are obliged to work with 1 license only, thus seven FX bureaus have revoked their licenses.
Forex bureaus are expected to comply with this requirement by June 30.
Some of the affected operators said they had requested CBK to cancel some of their licences so that they could meet the new ownership requirements. The cancellations will help the regulator to reduce the amount of idle capital in their premises.
The Central Bank also increased the capital requirements per bureau by 200 per cent last year. The CBK increased the core capital requirements for each forex bureau by 200 per cent last year, from Sh2.55 million ($30,000) to Sh5.1 million ($60,000). The regulator also increased the minimum balance that forex bureaus must maintain to $4,000 from $2,000 (Sh340,000 from Sh170,000).
Kenya is one of Africa’s largest growth markets with economic growth consistently reaching 4-5% YOY. Kenyas foreign exchange bureaus use spot FX platforms to mange their risk and exposure.
With the rise of internet, retail traders have been growing in number and the local bourse launched online trading in 2010 with the OST platform launched by CfC Stanbic Financial Services.
Kenya is East Africas largest stock market and the fourth largest in Africa. although there are only 55 companies traded, daily trade volume is a modest $5million with strong growth with local and foreign participation.
Africa is seen as the next best market, ACM Gold launched its Nigeria operation and more brokers are keeping an eye on the resource rich continent.
Forexmagnates team will be looking at the African market in the next quarterly report.