speculation has taken a negative turn in kenya..land forex,stocks(rise of technicians and shrt sellers) just like forbes...then pple start lukng for sm1 or smthng to blame when expectations of profit come tumbling down..those of us who ave goten a chance to interact with prof ndungu at AERC grad school will agree hes very brilliant.arrgnt perhaps but a top notch economist. we cant raise intrst rates now.its bad 4 biz.lets watch how the sh behaves next wk.

USDKES 100/- handle is the line in the sand for this fight club... Whoever can sustain the most blows and remain standing will rule the day. And that day points to 110/- instead of sub 100...

the house comittee will give it findings after 4months! can anyone tell this clowns that by then we could have been to 120 and back down? 4 months ago kes was ine mid 80s...

http://www.businessdaily...1/-/27ojfv/-/index.html

From this article,what is the most likely scenario going forward?.

CBK is in a tight corner , just kicking and throwing 360 degree punches to free itself .We should rather keep on giving suggestions on how to save the shilling.
CBK is now totally short of ideas .

what should be done to avoid 110? your views please?

Ban imports that we can do without[/quote]
Good one , I was disturbed to find chinese with a stand at the Nairobi international show selling imported hawkers products.
what value do these products add to the economy?Some of these things can be produced locally and be of higher quality

It is however not CBKs job to ban imports.

See, we have a govt that's spending faster than the economy can keep up. This fiscal year (June 2011 to June 2012) they want to borrow 120B from the public. So far, as at end Sept, they are 60B behind in their borrowings. That means two things: either they're not paying the right rates, or there isn't enough money for them to borrow.

So, what now? lets see. 60B shortfall, where to find this money? Any guesses who might have 60B public money stashed away somewhere? Any educated guesses?

Ban imports? Lets see...if we take the import bill for July 2011 and break it down, this is how it looks:

Industrial supplies (non food) 34%
Fuel 22%
food and bev 10%
machinery and capital equipment 15%
transport 11%
other goods 8%

So now, what can we ban/levy higher taxes and replace with local goods? Food and bev I suppose. So we save 10% on our import bill, that's 10B.

Really, there isn't much of a solution in sight for this problem.

I'd only advocate a ban on food and beverages, the rest I think we can levy a higher tax so we earn a bit more.
The problem is that this may in the short-term translate to higher inflation.
The key is still proper fx controls for a period 6-12 months until the Europeans get their backsides in gear