Kenyan Central Banks new Forex Laws hurting exchange bureaus

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 Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term 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 Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Read this Term 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.