Commerce

Ecobank suspended from forex market

Tuesday, March 29th, 2022 11:52 | By
Ecobank
PHOTO/ Courtesy
Ecobank

Ecobank Kenya has been suspended as a foreign exchange dealer in the Kenyan market from Tuesday, March 29, 2022, to Monday, April 4, 2022. During this time Ecobank cannot transact in the interbank foreign exchange market. However, all committed transactions as of March 28, 2022, can be settled.

In a statement on Monday, March 28, 2022, the Central Bank of Kenya (CBK) said that the action follows unsafe trading practices and breaches to the Prudential Guidelines on Foreign Exchange Exposure Limits in March 2022.

"In investigating Ecobank’s trading practices and a specific transaction that it had concluded, it is evident that Ecobank did not have sufficiently robust risk controls to prevent breaches on its foreign exchange exposure limits, or the inaccurate reporting of its position," CBK said.

The lender has been ordered to put in place a remedial plan to ensure the operational lapses that led to the non-compliance are addressed by Thursday, March 31, 2022. The remedial plan should also point to specific measures to address the unsafe trading practices that led to the non-compliance and to enforce adherence to orderly conduct as stipulated in CBK’s Guidelines on Foreign Exchange.

Ecobank will also be required to reverse the amount of additional exposure that was created as a result of the regulatory breach.

"Ecobank’s acknowledgement of its obligations as an authorised foreign exchange dealer and its commitment to address the underlying issues is noted. CBK reiterates the objective of building sound, fair and transparent financial markets, anchored in the law and according to global best practices," CBK added.

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