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Nov Inflation update: 19.72% up from 18.9% in Oct
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GGK
#11 Posted : Tuesday, November 29, 2011 12:06:09 PM
Rank: Member

Joined: 11/21/2006
Posts: 608
Location: Ruiru
Am off to Somalia,

Let me know when things improve
"..I am because we are. "― Ubuntu, Umtu,
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the deal
#12 Posted : Tuesday, November 29, 2011 12:12:50 PM
Rank: Elder

Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
Despite the liquidity crunch banks are still growing their loan books by 20+% the tightening has to continue

Also remember Kenya Current account deficit stands at 577 bln any loosening will sent it spiraling out of control...and the KES will be back above 100.
Only solution now is to choke economic growth with high CBR or let #Inflation choke it
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hisah
#13 Posted : Tuesday, November 29, 2011 12:39:36 PM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
the deal wrote:
Thats an alarming figure I now see CBR being hiked by another 100 basis points...the bourse has factored in these bad news smile

If Volcker's script is being followed by CBK, at least I expect CBR hiked by 100bps, but I also see 200bps being implemented. CBK is running out of time to force a mini recession before the June 2012 budget. As at @kularaha states, this is a serious catch 22 situation. I'm fearing for small banks as everyone starts saving furiously with deposit rates hitting the roof. Luxury businesses like hotels, jewellery shops etc will feel cold as basic needs take 1st priority.
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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hisah
#14 Posted : Tuesday, November 29, 2011 12:44:22 PM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
Cde Monomotapa wrote:
I see no use for a rate hike this week. Inflation (fuel & energy) will ease in Dec. I'd prefer CBR be maintained @16.5 just to manage inflation expectations downwards.

I keep telling you mafuta iko na wenyewe. Unless a GFC is let loose again to force brent back to $80 or lower, the cost will sustain these levels!
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Cde Monomotapa
#15 Posted : Tuesday, November 29, 2011 1:56:06 PM
Rank: Chief

Joined: 1/13/2011
Posts: 5,964
hisah wrote:
Cde Monomotapa wrote:
I see no use for a rate hike this week. Inflation (fuel & energy) will ease in Dec. I'd prefer CBR be maintained @16.5 just to manage inflation expectations downwards.

I keep telling you mafuta iko na wenyewe. Unless a GFC is let loose again to force brent back to $80 or lower, the cost will sustain these levels!

On the back of a stronger KES comrade..don't bite me head off Laughing out loudly Laughing out loudly atleast Brent has been stable @$105-110 for a while now.
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Cde Monomotapa
#16 Posted : Tuesday, November 29, 2011 1:59:06 PM
Rank: Chief

Joined: 1/13/2011
Posts: 5,964
$60-80 Brent will print next year. I am smack certain courtesy of a Western recession & consequently Eastern export slowdown.
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  | | Edit by user: Tuesday, November 29, 2011 2:06 PM | Reason: Not specified
Sufficiently Philanga....thropic
#17 Posted : Tuesday, November 29, 2011 2:08:43 PM
Rank: Elder

Joined: 9/23/2010
Posts: 2,225
Location: Sundowner,Amboseli
KulaRaha wrote:
Interesting situation, given previous CBK moves of "wait and see" have led us to the situation we are in now.

Will they raise rates or hold tight? I'd think it might be smarter to raise again, since it seems this inflation is not coming down soon.

Soo true!The price we have to pay for cheap money!
Been looking at the daily bond trading turnover and the figure has really dropped! No wonder the interbank rates have shot past 30% and the T/Bills are been seriously undersubscribed despite yeilds of 16.6% for the 91 day!
Interesting times these are!
@Hisah, are we headed back to the 90s? back to the bank runs?Havent done stanchart marathon in years!Laughing out loudly
@SufficientlyP
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GenghisCapitalLtd
#18 Posted : Tuesday, November 29, 2011 2:46:19 PM

Rank: Bona-fide

Joined: 11/2/2011
Posts: 191
Location: Nairobi
Things have just become thicker, possibility of the NSE ending the year lower than the 3000 mark.
Follow us on Twitter @genghiscapital
“Be a yardstick of quality. Some people aren’t used to an environment where excellence is expected.” Steve Jobs,iGenius
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guru267
#19 Posted : Tuesday, November 29, 2011 2:55:39 PM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
the deal wrote:
Despite the liquidity crunch banks are still growing their loan books by 20+% the tightening has to continue

Also remember Kenya Current account deficit stands at 577 bln any loosening will sent it spiraling out of control...and the KES will be back above 100.
Only solution now is to choke economic growth with high CBR or let #Inflation choke it


Even though the CBK chokes economic growth inflation must remain high!!!

The sooner Ndungu realises monetary policy will not solve this issue, the better...
Mark 12:29
Deuteronomy 4:16
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Mainat
#20 Posted : Tuesday, November 29, 2011 7:02:30 PM
Rank: Veteran

Joined: 11/21/2006
Posts: 1,590
I still maintain that raising CBR again to tackle inflation that is caused by supply side issues (rain->food which is still the largest component)is idiocy. Especially because people won't stop spending on food just because interest rates are going up.
Sehemu ndio nyumba
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