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Stanbic Disowns Research Note on Diverging Shilling Rates

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NAIROBI, Dec 3 Reuters Stanbic Bank Kenya, a unit of South Africas Standard Bank, has distanced itself from a research note issued by its parent that said a parallel exchange rate was emerging in Kenya, where the coranavirus crisis has hit dollar earnings.

The central banks official exchange rate has stayed around 110 shillings to the dollar, but the Standard Bank note published on Monday said Kenyan banks have shunned interbank deals at that level, offering the dollar at 113115 shillings.

The note said that two FX rates have been developing in the market since the end of June and early July a period when strains caused by the coronavirus crisis, such as a slide in vital tourist dollar revenues, were starting to be felt.

The exchange rate has long been a sensitive issue. The central bank has in the past challenged the International Monetary Fund when it said the shilling was overvalued.

When previously asked by reporters about the emergence of different rates, Central Bank of Kenya Governor Patrick Njoroge has said Kenya has a flexible rate policy and only intervenes to smooth volatility. He most recently repeated this on Friday.

The contents of the report do not reflect the position of Stanbic Bank Kenya Limited, Stanbic said in a statement on Thursday, distancing itself from its parents note.

Bankers say the central bank has told them it believes the shilling is fairly priced and say the bank has been monitoring dealings closely, telling banks that…

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