The Central Bank of Kenya (CBK) has revealed why it adopted a new formula of reporting on foreign currency rates, dropping estimations that had been blamed for the wide variations in the rates quoted by the apex bank and commercial lenders.
The apex bank has been publishing an exchange rate based on the weighted average rate from January of all interbank transactions executed on the previous day—a shift from the past when it published indicative rates provided by major players in the interbank market where lenders trade currencies and other currency derivatives directly between themselves.
