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Banks’ forex income hit by US dollar surplus
Besides reduced revenue from forex transactions, Kenyan banks are also witnessing a decline in income from lending following the lower interest rates policy by the CBK.
Excess US dollar liquidity and the decision by the Central Bank of Kenya (CBK) to hold the Kenya shilling steady at around Sh129 against the American currency has curbed banks’ revenue from foreign exchange trading.
Banks say the two factors have slowed down revenue from trading currencies by lowering margins in this business line where lack of volatility—rapid and unpredictable changes— has also reduced due to the stable rates that have been in place since August 2024.
