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Dollar remittances by diaspora boost shilling in festive period

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Commercial banks traded the shilling at an
Commercial banks traded the shilling at an average of 101.80 units to the US dollar on Monday, a slight appreciation from the closing rate of 101.84 recorded on Friday. FILE PHOTO | NMG 

Dollars remitted home by Kenyans living abroad in the festive period have helped the shilling regain some of the ground it lost against the greenback earlier this month, with light demand for the United States unit in the market also helping the local currency.

Commercial banks traded the shilling at an average of 101.80 units to the US dollar on Monday, a slight appreciation from the closing rate of 101.84 recorded on Friday.

With just three trading days this week due to the Christmas and Boxing Day holidays, the currency is expected to remain trading in a tight range as most investors sit out.

Traders said on Monday that dollar demand from oil and merchandise importers remained subdued on the day, and is likely to remain so until the end of the week, while banks were also selling some of their dollar holdings in order to meet shilling reserve requirements at the Central Bank of Kenya.

At the end of last week, the latest CBK data shows, official foreign currency reserves went up by $25 million (Sh2.5 billion) to $8.005 billion (Sh815 billion), suggesting that the regulator was taking up some of the dollars being sold by commercial banks.

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“We expect the shilling to be firmed up by end-year greenback inflows,” said Genghis Capital analysts in a market note on Monday.

The appreciation was also attributed to the tight liquidity in the market, with banks offloading the greenback so as to meet reserve requirements, amid subdued dollar demand from oil and merchandise importers.

The CBK, as a result, was in the market on Monday to mop up Sh10 billion through open market operations.

Analysts say the shilling was always bound to get a boost from higher remittances this month, going by past trends.

The remittances have in the past gone up significantly in December compared to the average over the other 11 months of the year.

Last year, December remittances stood at Sh20.8 billion, against a monthly average of Sh16.2 billion between January and November.

The same trend was seen in 2016, when the December remittances stood at Sh16.4 billion against an average of Sh14 billion for the rest of the year.

The shilling has also been buoyed further by inflows from the tourism industry during the festive period.

Hoteliers in Mombasa have reported that in the December holiday season, the number of international holidaymakers has gone up by 22.4 percent over last year, following an increase in the number of chartered, international direct and local daily flights to coastal resort city.

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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

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The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

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