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the kes hits 83-are cbk concerned about inflation?
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kizee1
#1 Posted : Wednesday, March 02, 2011 6:59:04 PM
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Location: nairobi
so today the kes traded at 83.10/20, the mof(ps kinyua) said they will not intervene...now this is rather worrying given that
1.crude is at that +100 usd/bbl price
2.the country is facing drought and might need to import food
3. the micro/sme sector will hurt from a weak exchange rate
4. the country will soon turn to fuel generators

...al this makes me wonder whether we shall hit the much touted 6pct growth level...pros and cons exist one could say..whats ur take good folks? is any wazuan hurting/gaining from such a weak exchange rate?
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Cde Monomotapa
#2 Posted : Wednesday, March 02, 2011 8:00:49 PM
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I'm a beneficiary of a weak shilling. What will mitigate this inflation will be good rains in the upcoming rainy season. There is little we can do about USD strength on the global market or geo politics affecting oil unless CBK starts dumping its USD reserves on the open mkt or GoK reduces taxes on fuel respectively-scenarios that are impossible in the short term IMHO.
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Cde Monomotapa
#3 Posted : Wednesday, March 02, 2011 8:53:18 PM
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I have always been of the opinion that a successful Kenyan BPO sub-sector would be the silver bullet in stabilising/strengthning of our Kes with potential forex inflows larger than coffee,tea & tourism combined but all of a sudden the hype around it disappeard!! Plus when we get the BPO sector right we'd ride the global recovery and grow earnings YoY for the next 20yrs or so!! The pple responsible ought to read this...
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mlennyma
#4 Posted : Wednesday, March 02, 2011 9:50:43 PM
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So,is this a boom for kq?
"Don't let the fear of losing be greater than the excitement of winning."
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erifloss
#5 Posted : Thursday, March 03, 2011 8:04:24 AM
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Beneficiaries=exporters. Hope being an agric driven economy the cash will be enough to go around.
'They say money cannot buy me happiness but when i compare when i had none and now, i'm happier' Kevin O'leary
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RVP
#6 Posted : Thursday, March 03, 2011 8:14:06 AM
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Agreed. Good news for exporters. I can confirm :)
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kizee1
#7 Posted : Thursday, March 03, 2011 9:42:06 AM
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exporters DO NOT benefit from an overly weak ccy, please note that kenya is a net importer so unless u generate ur own energy and ride a bike as well as transport ur produce by bike...ur no better off than the rest of us...meanwhile mwananchi wa kawaida ataumia
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Elder
#8 Posted : Thursday, March 03, 2011 9:48:45 AM
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RVP wrote:
Agreed. Good news for exporters. I can confirm :)


Wish it could hit 90, even 100.
He who can express in words the ardour of his love, has but little love to express. - Petrach, Son. (That men by various ways arrive at the same end. - Montaigne, The Essays of.)
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RVP
#9 Posted : Thursday, March 03, 2011 10:30:02 AM
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Cant speak for everyone. I guess on AVERAGE it does not. The nature of the business probably matters. I would say it favors service exporters more than it does tangible product exporters.

kizee1 wrote:
exporters DO NOT benefit from an overly weak ccy, please note that kenya is a net importer so unless u generate ur own energy and ride a bike as well as transport ur produce by bike...ur no better off than the rest of us...meanwhile mwananchi wa kawaida ataumia
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Sufficiently Philanga....thropic
#10 Posted : Thursday, March 03, 2011 10:50:33 AM
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Time to demand payment in USD from your clients/debtors/employers!
@SufficientlyP
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Cde Monomotapa
#11 Posted : Thursday, March 03, 2011 11:07:34 AM
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Sufficiently Philanga....thropic wrote:
Time to demand payment in USD from your clients/debtors/employers!

All the best with that, lol!!
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Pierce
#12 Posted : Tuesday, March 08, 2011 9:37:20 AM
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It's almost catastrophic for net importers....ask me!!Pray
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Wa_ithaka
#13 Posted : Tuesday, March 08, 2011 9:42:52 AM
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Another reason not to support Ndungu as governor. Dude is sleeping on the job.
Interest rates should be going up to cushion the economy from higher fx rate but also inflation which will almost certainly go higher given current drought
The Governor of Nyeri - 2017
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hisah
#14 Posted : Tuesday, March 08, 2011 10:47:14 AM
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http://www.businessdaily...8/-/h68k4c/-/index.html

I'm waiting to see how KE will achieve 6% GDP target this year at this rate and even sustain it...

I'm waiting to see how MPC will also keep the CBR at 5.75% or lower it with inflation charging through the roof.

I'm waiting to see how CBK will keep treasury bills/bond rates down with inflation pressures increasing the budget gap.

I'm also waiting to see how banks will keep their lending rates down with inflation risks increasing.

I'm waiting to see how a weak shilling will benefit a net importing nation - manufacturing input costs and farming costs with looming drought likely to spike food importation demand. Note global food inflation is near all time highs of 2008.

I'm waiting to see how long the fuel price controls hold out the raging global oil inflation. How can you control what you don't produce...?

Oh, those budget and trade deficits will hurt... But I like economics since you can always 'tweak' one time spikes if the math doesn't arrive at your intended answer. This is why I dislike accounting, cooking figures is NOT permitted ;-)
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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VituVingiSana
#15 Posted : Tuesday, March 08, 2011 11:02:50 AM
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KQ:
- The assets will rise in value [since the planes are 'priced' in US$ then converted to KES on the balance sheet [Forex Assets > Forex Liabilities]
- KQ will suffer from the RISE in fuel costs [unless 100% hedged] both in rise in Oil Prices & KES/US$.
- All I can hope for is that Ethiopian suffers a blow as well. Ethiopian has a free hand but the economy is controlled.
- KQ is screwed until JKIA is expanded. That is a long-term solution.

Exporters:
- Horticulture firms may earn more KES for the US$, £ or € but the INCREASED cost of freight [due to KES depreciation & fuel price increases] will hurt them as well.
- Drought has hurt production.
- Use of diesel to power irrigation pumps has also hurt production.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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kizee1
#16 Posted : Wednesday, March 09, 2011 10:07:15 AM
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still going..seeing 83.50/60
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hisah
#17 Posted : Wednesday, March 09, 2011 3:50:04 PM
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kizee1 wrote:
still going..seeing 83.50/60


Ksh 90 is the break off point...
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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kizee1
#18 Posted : Wednesday, March 09, 2011 3:53:26 PM
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hisah wrote:
kizee1 wrote:
still going..seeing 83.50/60


Ksh 90 is the break off point...

BLASPHEMY!
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Cde Monomotapa
#19 Posted : Wednesday, March 09, 2011 6:07:12 PM
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kizee1 wrote:
hisah wrote:
kizee1 wrote:
still going..seeing 83.50/60


Ksh 90 is the break off point...

BLASPHEMY!

Tihihi...
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story teller
#20 Posted : Wednesday, March 09, 2011 6:14:27 PM
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Elder wrote:
RVP wrote:
Agreed. Good news for exporters. I can confirm :)


Wish it could hit 90, even 100.


I don't mind it hitting 90 or 100 but its not good for the country..fuel costs will go through the roof.
It's not hard to make decisions when you know what your values are.
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