African payments system PAPSS plans to launch FX market platform this year

By Duncan Miriri and Karin Strohecker

NAIROBI (Reuters) - A pan-African payments infrastructure supplier designed to facilitate commercialized connected the continent is piloting an African currency marketplace level to boost commerce crossed borders successful the region, its main enforcement said.

The Pan-African Payments and Settlement System (PAPSS), backed by 15 cardinal banks connected the continent, expects to adhd the level aboriginal this twelvemonth to complement its payments infrastructure that it says is presently integrated with 150 commercialized banks.

"The rates volition beryllium marketplace driven, and our strategy is capable to bash a matching based connected the rates offered by the antithetic participants successful our ecosystem," Mike Ogbalu, the CEO of PAPSS, told Reuters successful an interrogation from Cairo.

Africa's overseas speech markets are often shallow and liquidity is limited, with South Africa and Nigeria dominating geographically and overmuch of the wider trading centred astir section and hard currency pairs. Those seeking different African currencies indispensable typically unafraid dollars first.

However, the portion has besides seen immoderate large currency reforms with countries specified arsenic Nigeria, Egypt and Ethiopia pushing up with efforts to determination to much market-based regimes.

The Africa Currency Marketplace, arsenic the level volition beryllium known, volition let parties to speech section currencies directly, Ogbalu said.

He cited the illustration of an Ethiopian hose selling naira-denominated tickets successful Nigeria, which could past speech its naira gross with a Nigerian institution trading successful Ethiopia utilizing the birr.

"Our strategy volition intelligently lucifer them and past enactment A volition get Naira successful Nigeria and enactment B volition get birr successful Ethiopia. The transaction conscionable completes without immoderate third-party currency being progressive astatine all," Ogbalu said.

There person been predominant lawsuit of companies not being capable to repatriate their gross from different countries successful the region, whenever unit oregon economical problems origin dollar shortages successful markets similar South Sudan oregon the Central African Republic.

Companies operating successful the portion person been forced to instrumentality a writedown each fiscal twelvemonth to relationship for currency revaluations successful markets with volatile currencies, Ogbalu said.

Others person invested successful assets similar existent property to effort to sphere the worth of their assets successful specified markets.

There person been attempts to usage cryptocurrencies similar Bitcoin to get astir that occupation but their usage is inactive low, partially owed to deficiency of ineligible frameworks to enactment their usage successful markets similar Kenya.

"Those are immoderate of the things we deliberation that this African currency marketplace volition unlock," helium said, saying it would beryllium "transformational" without giving details connected expected size oregon trading volumes.

(Reporting by Duncan Miriri and Karin Strohecker; Editing by Christina Fincher)