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Ruto's crackdown on brokers spooks banks

Banks face penalties for violating CBK's regulations

President William Ruto during the listing of Laptrust Imara I-REIT at the Nairobi Securities Exchange.

Banks have bowed to threats by President William Ruto to clamp down on those taking advantage of the shortage of dollars in the country.

On Wednesday, shortly after Ruto’s remarks, the Central Bank of Kenya (CBK) issued a new foreign exchange code that has sent a shockwave through the banking industry.

Following a recent spot-check conducted across multiple banks on Wednesday, it was discovered that the selling price of the US dollar ranged between Sh136 and Sh142.


This marks a decrease from the previous week's range of Sh140.55 to Sh144.50. The buying price of the dollar by the banks ranged from Sh127 to Sh130.30 per unit.

On the other hand, forex bureaus were found to be selling dollars at a rate between Sh139 and Sh141 to their customers. This represents a decline from the previous week's rate of Sh142 to Sh146.

The code aims to maintain the integrity and effective functioning of the forex market in Kenya by prohibiting banks from manipulating price movements or disrupting the market's functioning.

Banks must conduct a self-assessment and submit a report on their compliance level to the CBK by April 30, 2023, and submit a detailed compliance implementation plan by June 30, 2023.


Failure to comply with the code will result in monetary penalties and other administrative action.

President William Ruto warned traders not to hoard dollars, as they may expect losses in a few weeks, following the implementation of corrective measures to mitigate against the shilling’s depreciation and shortage of the greenback.

He then tasked CBK with reviving the interbank forex market, which collapsed due to the depreciation of the shilling.

For the people who work numbers, I am giving you free advice that those of you who are hoarding dollars… you shortly might go into losses,” President Ruto said.


Through the Central Bank, we are having conversations to reinstate the interbank exchange market that has since not worked. I am happy that the players in that sector including our banks are participating,” he said.

Due to the shortage of US currency, the spread between the official and open market rates had increased, resulting in a record-breaking price of Sh145 per unit when purchasing dollars from banking halls and forex bureaus.

This led to the emergence of a black market for the US currency.



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