Kenyan banks are bowing out of a $500 million monthly oil import deal with Gulf states, opting for new competition. The deal extends import credit periods to 180 days, easing dollar shortages and stabilizing foreign exchange markets. Recent reports from Epra show NCBA Group Plc, Absa Bank Kenya Plc, and Co-operative Bank exiting the deal, making way for new entrants.
New banks are vying for business, as securing letters of credit from importers is not guaranteed. KCB Bank, a key player, has facilitated billions in fuel imports under a government-backed deal. KCB Group CEO Paul Russo highlights the importance of expertise in the oil and gas trade. The government’s consortium aims to ease forex pressures and avoid economic meltdowns.
The scheme, set to expire in December 2024, postpones dollar demand and promotes financial stability. Previously, oil marketers demanded $500 million monthly in foreign currency. The government-to-government initiative is a critical measure to maintain economic equilibrium amidst money supply constraints.
\
[ad_2]
Source link
