Absa Bank Provides the Macro-Economic Overview and Risk Management for FX Earners

Nairobi, Thursday, May 11, 2023,

KNA by Rebeccah Ominde.

Absa has provided the Macro Global and domestic overview in an interactive workshop on the 2023 Macro-Economic Outlook and Risk Management for FX Earners.

Speaking during the event, Absa Bank Kenya Managing Director Mr. Abdi Mohammed said, “I see this more as a series of conversation because the macro economy continues to evolve, and therefore the need for our customers and ourselves to continue engaging as we go through the different phases which is quite important because there are multiple lenses through which you can build the economy.”

He added that customers are in different sectors like imports, exports, banking views of the economy and financial markets citing corporate and the Government where the bank has been engaging them for the last few months.

“As an organization, we are in a number of markets in the continents and the bigger question is how we can work as Absa in East Africa and offer solution together so as to provide service to our customers in a more effective way,” stated Mohammed.

At the same time, Absa Head of Macro and Fixed Income Research and Chief Economist Mr. Jeff Gable presented a graphic analysis of the Real Gross Domestic Product (GDP) and the International Monetary Fund (IMF) projections done from 2021 between different countries which predicts that Oil prices are below peak but prices are likely to remain high on production cuts.

Gable disclosed that the public debt was rising even before the Covid pandemic and the rising debt limits space for government-led investors and infrastructure consequently raising the risk of sharp market moves.

Despite the economic headwinds, Gable said, the East African economy leads the way since it has maintained a growth edge over its regional and global peers.

          “Looking at Kenya’s overview, the Purchasing Managers Index has weakened making it a high risk of debt distress,” he claimed.

Concurrently, the Head Global Markets Clients Solutions and Africa Regional Operations, Mrs. Vuyo Teleki pointed out the Risk Management Policy that supports the achievement of an organization's objectives by enabling the identification and evaluation of risks.

According to Teleki, this policy is intended to establish a control framework and outline the organization's philosophy on Risk Management.

Further, she explained the Zero Premium Collar which is a lock in protection rate whilst giving flexibility to participate in further depreciation until cap rate.

On Forward Exchange Contract, she defined it as the contract between the bank and its customers in which the exchange of currencies would take place at a future date at a rate of exchange in advance under the contract.

“Interest Rate Swaps is a suitable product for clients who do not want to be exposed to increases in interest rate past the production rate secured,” said Teleki.

Meanwhile Bidco Africa CEO, Mr.Vimal Shah while insisting that banks need to support local industries, said “If you are an importer and you are importing raw materials that you manufacture in Kenya, you struggle to see how to get a solution and this is where the Absa team went out of the way to help us.”

 Courtesy; K.N.A