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HomeAfricaKenya Banks Book $100m Forex Gain From Foreign Units

Kenya Banks Book $100m Forex Gain From Foreign Units

Kenya’s tier one banks recorded currency gains worth Ksh14.5 billion ($100.14 million) in the first half of the year due to the shilling’s depreciation against the local currencies of regional subsidiaries, boosting the value of their earnings, dividends and assets.

This was a nearly four-fold rise compared to the gains worth Ksh3.96 billion ($27.35 million) reported in the first half of last year.

Regional subsidiaries normally prepare their financials in their home currencies (functional currency), but when the financials are amalgamated into the group, the currency is translated into shillings (reporting currency).

This means that there are exchange losses or gains factored in depending on whether the shilling has strengthened or weakened against the respective operating currencies of the subsidiaries.

The shilling depreciated by 18 percent against the Uganda shilling between June 2022 and June this year, and by 13 percent and 4.8 percent against the Tanzania shilling and Rwandese Franc respectively.

Source: The East African



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