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Kenya in no rush over new IMF standby facility, says CBK : The Standard

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Central Bank of Kenya Governor Patrick Njoroge

Kenya is in no rush to secure a new standby credit facility with the International Monetary Fund as its economy continues to show strength, central bank governor Patrick Njoroge said on Thursday.

The previous $989.8 million arrangement expired in September after the government failed to meet the IMF’s conditions for an extension, including the repeal of a cap on commercial lending.
Njoroge told reporters Kenya was talking the IMF about a new standby facility, but was not desperate for a deal.
“It’s not that we are on the ropes, (that) the economy is on the ropes and we need the IMF to come and sort us out,” he added.

SEE ALSO :IMF chief sound warnings as leaders gather in Davos

Njoroge offered no timeline for when an agreement might be reached but said conversations would continue during the IMF’s Spring meetings in April.
The government is preparing to issue a $2.5 billion Eurobond and analysts have said it could secure a better interest rate if the standby arrangement with the IMF was in place.
But Njoroge said the two things were different.
“Some of us are so fixated about these two, that they are aligned, that’s maybe why we at times feel that we are under pressure… We will do it when we need to,” he said.
“There is no rush.”

SEE ALSO :Kenya confident of securing IMF loan facility

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He was speaking a day after the central bank kept its benchmark lending rate at 9.0 percent, saying inflation expectations remain within the target range.
Njoroge said the Kenyan economy was still on course for 6.3 percent economic growth this year, driven by agriculture, services and a further recovery in industry, even though the external outlook is weakening.
The central bank estimates 2018 growth at 6.1 percent.
China’s slowdown and trade dispute with the United States, and continued uncertainty over Britain’s exit from the European Union, are all dragging on the global economy.
While Kenya will see a continuation of existing trade arrangements with Britain, Brexit may affect foreign direct investment into the UK.

SEE ALSO :IMF urges for tighter tech laws

“So which way forward, well, go figure,” Njoroge said on Brexit. “Those external elements will continue to push down the expectations and outcomes in the global economy and that obviously has implications for us.”
On Wednesday, the central bank restated its view that the cap on commercial lending rates — set at 4 percentage points above the benchmark by lawmakers in late 2016 — constrains its ability to conduct monetary policy effectively.
A Kenyan court ruled in March that the cap was unconstitutional, but judges suspended the decision for 12 months to allow parliament to re-examine the law. Private sector credit grew by 3.4 percent in the 12 months to February, compared to 3.0 percent in January, the central bank said on Wednesday.
It forecast the current account deficit would narrow to 4.8 percent of GDP in 2019 from an estimated 4.9 percent in 2018.
“We expect our current account deficit to remain around 5 percent in the medium term,” Njoroge said.

SEE ALSO :Kenya in talks with IMF over new standby facility

International Monetary FundPatrick Njoroge



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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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