Which Bank Has the Best Exchange Rate in Kenya?

Everyone wants the best value for their money. If you plan to exchange currency in Kenya, you may be looking for banks with the best exchange rates. Whether you’re wondering where to exchange foreign currency in Kenya or you’re interested in buying dollars in Kenya, this post is for you. 

Not all banks and transfer services are the same, with exchange rates and fees varying wildly. In this article, we’ll look at the factors that affect currency exchange rates, followed by the top banks with the best foreign exchange rates in Kenya. 

Why Are Foreign Currency Exchange Rates Important?

Foreign exchange rates matter because the lower the cost of converting to Kenyan Shillings, the more money for you. Banks and other financial service providers often charge conversion fees. 

Additionally, there could be markups and other costs in the exchange rate that could increase the conversion fee. So, it’s important to look for the best exchange rates regardless of your conversion method. 

Factors Affecting Bank Foreign Currency Exchange Rates

Bank foreign currency exchange rates, or retail exchange rates, are usually affected by a combination of factors, including:

Central Bank Policies

Central bank policies play a significant role in bank foreign exchange rates. Policies like interest rate decisions and other foreign exchange interventions impact exchange rates.

Interbank Exchange Rates

Banks also base their foreign exchange rates on the prevailing interbank exchange rates, the rate at which large financial institutions exchange foreign currencies with each other. 

Supply and Demand

Banks must also consider supply and demand when determining their exchange rates. A limited supply of a particular currency may result in a stronger exchange rate. 

Economic Performance

Banks usually monitor major economic indicators such as inflation, GDP growth, trade balances, and employment figures when determining foreign currency exchange rates. Strong economic data may result in a better exchange rate for that currency. 

Overhead Costs and Profit Margins

Another significant factor that causes differences in exchange rates is operating costs and profit margins. Banks charge an extra amount on top of the interbank exchange rate to cover their overhead costs and generate profit. This margin differs from bank to bank and affects the exchange rates offered to the customer. 

Which Bank Has the Best Exchange Rate in Kenya?

If you’re wondering where to exchange foreign currency in Kenya, here are the top banks offering the best exchange rates. 

1. ABSA Bank, Kenya

ABSA Bank, formerly Barclays, is one of the most popular banks among people who operate forex trading accounts. It’s a reputable international bank with attractive foreign exchange rates. 

ABSA has taken things a step further by providing an app designed to help customers buy and exchange foreign currencies and make international payments in multiple currencies. 

The NovoFX app is a convenient and innovative way to perform outward cross-border transactions in various currencies with real-time exchange rates. With 14 available currencies, you can make payments and exchange currencies at favorable exchange rates. 

Some of the foreign exchange features offered by the bank include: 

• Spot foreign exchange: This solution is suitable if you need foreign currency within two working days. A spot deal is an agreement you make with the bank to sell or purchase a specific amount of foreign currency at a specified exchange rate. 
• Forward foreign exchange: This solution is designed to help you eliminate the risk of currency fluctuations by giving you a forward exchange contract rate based on the prevailing spot rate plus or minus a premium or discount. 

2. Standard Chartered Bank

Standard Chartered is another bank with the best exchange rate in Kenya. It leverages its international footprint to offer its clients wide access to foreign currencies.

Standard Chartered is one of the top options for anyone interested in buying and selling currency in Kenya. It offers competitive, negotiable rates for foreign exchange transactions and the convenience of making transfers in 19 currencies using the bank’s online platform. 

Another advantage of using Standard Chartered for foreign exchange transactions is exclusive access to global economic updates, which help you make informed financial decisions and identify more investment opportunities. 

With Standard Chartered, you can buy and sell major currencies over the counter in any of the branches countrywide. Moreover, it offers preferential rates for amounts over $10,000 or its equivalent in foreign currency. 

You can buy foreign exchange from Standard Chartered to support various transactions such as purchases and payment of school fees abroad in foreign currency. 

3. Equity Bank

Equity Bank is another top-choice bank with favorable exchange rates in Kenya. Recently, Equity Group Holdings unveiled EazzyFX, an innovative online trading platform that allows customers to conveniently buy and sell foreign currency digitally.

EazzyFX is a secure platform you can use to trade in real-time, enjoying great deals at a competitive market price.

The platform offers a seamless foreign exchange experience where you can buy and sell foreign currency without visiting an Equity branch or making phone calls. The platform also gives you access to competitive prices on major traded currencies. 

Equity also allows you to buy or sell foreign currency over the counter at any of their branches countrywide. This service is available for major currencies like the US dollar, Sterling Pound, and Euro. Plus, you get preferential rates for amounts higher than $5,000.

To sign up for EazzyFX, you:

• Must be an Equity Bank account holder
• Require a duly signed EazzyFX mandate
• Must operate an entity with foreign currency obligations

4. I&M Bank

As an international bank, I&M is connected to a vast network of foreign exchange markets and global currency hubs. The bank offers foreign exchange services and facilitates remittances in 11 major currencies. 

I&M offers transactions for SPOT and FORWARD foreign exchange services in all 11 currencies and also does specific derivatives for qualifying customers. 

It provides competitive foreign exchange rates through its strategically located network, and you can buy and sell foreign currencies both online and over the counter at any of its branches. However, only three foreign currencies are offered for cash transactions: the USD, EURO, and GBP. 

To get the best deal for buying and selling foreign currency in Kenya, take time to research the top banks. Whether you’re transacting internationally or providing financial support for loved ones, you need the best value for your money.