African FX Infrastructure Continues to Modernize, Reuters Adds 3 Benchmarks

Thomson Reuters announced today that it has won a competitive bidding process to provide currency benchmarks for three markets to which the financial news and data providers refer to as Africa’s most vibrant and dynamic economies – Kenya, Ghana and Zambia. The three currencies can now be found on its flagship desktop trading and information platform, Thomson Reuters Eikon.

Starting this week, Thomson Reuters Benchmark Services Ltd will operate currency benchmarks for the Kenyan shilling, Ghanaian cedi and Zambian kwacha, beginning a process which will see the benchmarks move from a manual telephone-based system to a modern automated analysis, bringing them in line with the way rates are processed in the leading financial centers of the world. The Trade Association for the Emerging Markets, EMTA organization and its African Currency FX Working Group have selected Thomson Reuters to provide support to market these three benchmarks.

“These three global-standard benchmarks are integral to the development of three of Africa’s most exciting economies,” said Sneha Shah, Head of Financial & Risk, Africa, Thomson Reuters. “Kenya is the major trading Hub Hub A hub as its name suggests describes the center of activity or a focal point. In terms of finance, the term hub can refer to Hub and Spoke Trading or a liquidity hub. However, the terms are not interchangeable, but they do overlap. Hub and Spoke trading refer to a network that posts bids and offers for an asset and therefore creates a real market. For example, Hub and Spoke trading allow traders to see the other submissions and offers from other traders on the platform. This is a popular method A hub as its name suggests describes the center of activity or a focal point. In terms of finance, the term hub can refer to Hub and Spoke Trading or a liquidity hub. However, the terms are not interchangeable, but they do overlap. Hub and Spoke trading refer to a network that posts bids and offers for an asset and therefore creates a real market. For example, Hub and Spoke trading allow traders to see the other submissions and offers from other traders on the platform. This is a popular method Read this Term for east Africa, Ghana is growing in the west and Zambia is a country to watch in the south with exciting developments in its commodities and derivatives markets. Of the key benchmarks globally for which we are the official calculator, 22 are on the African continent. Now there are 25, contributing to the seamless and efficient flow of currencies among the African countries and their global trading partners.”

There now follows a three stage transition process to reduce the reliance on manual reporting, according to Thomson Reuters. The first stage is the transition to Thomson Reuters' service, with no immediate alteration to the current manual, quote driven method in which calculators gather quotes from market participants. The second stage begins in August, with automated collection of data from the ten most active contributors to the rates and semi-automated submissions from others. Thomson Reuters will then launch an open consultation on the possible use of transaction data in a subsequent phase.