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MPC in Kenya HIKES CBK Rate BY 400BP to 11%
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Cde Monomotapa
#101 Posted : Wednesday, October 12, 2011 6:59:06 PM
Rank: Chief


Joined: 1/13/2011
Posts: 5,964
KulaRaha wrote:
Cde Monomotapa wrote:
KulaRaha wrote:
Today they're in the market mopping up shillings, while interbank is at 13%+ already.

Does anyone think in CBK?

Yes. Sell your forex.


Sell my forex and do what with shillings?

Why dont CBK sell those reserves they're hoarding? Isn't this what they're for? Ama they need them to bankroll some politicians next year?

Now we're getting to the gist of things!

My apologies. I was reffering to U as a bank. The KES gained today as a result of the reserve repo.
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ProverB
#102 Posted : Wednesday, October 12, 2011 7:02:10 PM
Rank: Veteran


Joined: 3/12/2010
Posts: 1,199
Location: Eastlander
the deal wrote:
The money markets are very dry..liquidity crunch...look at today's 20% subscription of T-bills..they also got 17% through today's repo's...what next printing money? OccupyNairobi should be changed to occupy CBK...


Commercial banks are trying to stifle CBK to hike rates further..
..slap back for raising CBR? source intoned if CBK can afford tbills 15%..it can definately try 17..

Question.. tbills proceeds are tied to actual spending..what happens if they cannot get the cash?
..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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KulaRaha
#103 Posted : Wednesday, October 12, 2011 7:05:32 PM
Rank: Elder


Joined: 7/26/2007
Posts: 6,514
Cde Monomotapa wrote:
KulaRaha wrote:
Cde Monomotapa wrote:
KulaRaha wrote:
Today they're in the market mopping up shillings, while interbank is at 13%+ already.

Does anyone think in CBK?

Yes. Sell your forex.


Sell my forex and do what with shillings?

Why dont CBK sell those reserves they're hoarding? Isn't this what they're for? Ama they need them to bankroll some politicians next year?

Now we're getting to the gist of things!

My apologies. I was reffering to U as a bank. The KES gained today as a result of the reserve repo.


It wasn't a reverse repo, it was a repo.

Kes gained coz there were big sellers, local and offshore.

Watch it lose tomorrow...fundamentals do not support the local unit.

Stop spending like money is growing on trees, and let the economy cool off. Unless you want food riots soon!
Business opportunities are like buses,there's always another one coming
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kizee1
#104 Posted : Wednesday, October 12, 2011 7:10:06 PM
Rank: Member


Joined: 9/29/2010
Posts: 679
Location: nairobi
KulaRaha wrote:
Cde Monomotapa wrote:
KulaRaha wrote:
Today they're in the market mopping up shillings, while interbank is at 13%+ already.

Does anyone think in CBK?

Yes. Sell your forex.


Sell my forex and do what with shillings?

Why dont CBK sell those reserves they're hoarding? Isn't this what they're for? Ama they need them to bankroll some politicians next year?

Now we're getting to the gist of things!


finally someone who is thinking!..ladies and gents this is the only solution! the reason why kes weakend and why inflation run amock was because cbk printed money to buy fcy! if u think im lying then explain to me how cbk cud afford kes 100bn for this purpose, it wasnt budgeted, didnt come from their reserves, they simply came up with it from thin air..infact in the initial phase of the fcy accumulation cbk wud state that the fcy purchases were being done for MONETARY POLICY PURPOSES...CBK MONETIZED THE ECONOMY TO BUY RESERVES...HOW FREAKING LUDICROUS IS THIS? THE AMOUNT PRINTED COULD HAVE BUILT 3 FREAKING THIKA ROADS AND WE WOULD NOT OWE ADB A CENT WE WOULD NOT HAVE INFLATION AT +17PCT BECAUSE THE RESULTANT GROWTH FROM THIKA ROADS EXPANSION WOULD CREATE A NEAR MATCHING DEMAND FOR MONEY..IS ANYONE ELSE AS APPALLED BY THIS? ITS HIGH TIME CBK WERE STRIPPED OF THEIR ABILITY TO MONETIZE..
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Drunkard
#105 Posted : Wednesday, October 12, 2011 7:16:07 PM
Rank: User


Joined: 5/3/2011
Posts: 559
selah wrote:
What I dont get is, why increase CBR when inflation is not being caused by too much liquidity but imported inflation?

The Ksh speculative attack is a symptom of weak economic fundamentals and I think the CBR hike is just exacerbating the problem.

CBK is powerless unless a concerted effort to cut the current and fiscal deficit is addressed the speculators will continue hitting the Ksh hard.





Increase the CBR is a way to attack the problem from two fronts, first it reduce the demand of the dollar and secondly it cools inflation since inflation is a fanction of nominal rate and real rate.

In general the problem is not entirely on the Shilling it is partially driven by the appetite of US treasury securities drying up Dollars in foreing exchange markets. Dollar is actually loosing value in the long term.
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Cde Monomotapa
#106 Posted : Wednesday, October 12, 2011 7:17:58 PM
Rank: Chief


Joined: 1/13/2011
Posts: 5,964
In other constructive matters..this is what our EAC central planners were having tea over today.

http://www.centralbank.g...0OCTOBER%2012%202011.pdf
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guru267
#107 Posted : Thursday, October 13, 2011 7:31:59 AM
Rank: Elder


Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
Drunkard wrote:
inflation is a function of nominal rate and real rate.


This theory has yet to be proven to hold any substantial substance in developing countries like kenya.

Inflation in such is usually a function of supply factors..
Mark 12:29
Deuteronomy 4:16
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'user'
#108 Posted : Thursday, October 13, 2011 9:02:00 AM
Rank: Veteran


Joined: 12/3/2010
Posts: 1,141
Location: Londokwe
The truth is srory coming out ,Ndungu is fighting a losing war.The dollar is getting lost in mega scandals.
Arudishe CBK rate chini tena.raising the rate is futile .
2012 is here.Kenya is Ours.Be Part of The Peace Keeping Mission To Protect Our Motherland.Say No To Violence and Tribal Hatred .If you can read this,wewe ni mtu amesoma, usifikirie kama mtu hajaenda shule .Ni Hayo Tu
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KulaRaha
#109 Posted : Thursday, October 13, 2011 9:36:25 AM
Rank: Elder


Joined: 7/26/2007
Posts: 6,514
We just spent 1B building a house for the PM, and in one year we wont have a PM as per the new constitution.

We, stupid Kenyans, vote for stupid leaders, who appoint stupid people to run our Ministries and CBK.

Then we cry when our currency gets bashed and interest rates soar.

Blame yourselves, it all our OWN FAULT!
Business opportunities are like buses,there's always another one coming
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'user'
#110 Posted : Tuesday, October 25, 2011 9:54:09 PM
Rank: Veteran


Joined: 12/3/2010
Posts: 1,141
Location: Londokwe
bado at 101.
our goose is cooked.no dollars coming in from tourism and we are at war.
2012 is here.Kenya is Ours.Be Part of The Peace Keeping Mission To Protect Our Motherland.Say No To Violence and Tribal Hatred .If you can read this,wewe ni mtu amesoma, usifikirie kama mtu hajaenda shule .Ni Hayo Tu
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Cde Monomotapa
#111 Posted : Tuesday, October 25, 2011 10:05:05 PM
Rank: Chief


Joined: 1/13/2011
Posts: 5,964
'user' wrote:
bado at 101.
our goose is cooked.no dollars coming in from tourism and we are at war.

neither are probox and maize smile
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