chek out m3 stats for oct on the knbs site, m2 figs r lower, surely where have u been? cbk have been tightenin since oct..loans are flowing at what? +20pct?

I see two scenarios on Ksh for the rest of the year. The key I think is whether GoK is able to raise the $600m it was looking for.
If its able to, come Feb or March, CBK will start reducing CBR to avoid risk of an actual recession and generally relaxing the exchange controls/interventions. With oil spiking upwards, I'd expect Ksh to go towards an equilibrium of Ksh90-95. Assuming no further daily sales from CBK of $.

If GoK only raises a portion of the $600m, CBK will still have to ease int rates. However, there will now appear a gap between CBR and t-bill coupon. Ksh will then float juu ya Ksh100 with or without CBK support.


Kulahepi- i think Q3 vs Q4 will be more relevant. Also, are these new loans or revolving credits?

Any idea which foriegn banks are involved in this?

KulaRaha, did you get a whiff of this earlier?

UBA customer deposits down 55pc as clients eye higher-yielding investments

http://www.businessdaily...552/1293008/-/9un8su/-/

Goldman, JP Morgan, Deustche, Barclays PLC

One Mr Franklin expects bills yields to shoot to 35%... Indeed I cant wait for the budget.

http://www.businessdaily...8/-/wy1u2wz/-/index.html

Kizee1-I think we are conflating different issues. Firstly, has strong is the money supply->fx rate link? Imho, money supply is one of many factors, but not the primary driver which is infact BoP (which I'll deal with another day)
In terms of 2012 prospects for Ksh. My understanding is that the $600m is being repayed over quite a long-term horizon. I doubt if GoK will seek to convert it all to Ksh in one go. Instead, it'll probably be spread over the next 6/12 months and in essence help maintain $/Ksh. In effect, CBK will cut CBR and generally step back from its aggressive monetary policy, Ksh will weaken, but GOK will come in and swap $ for Ksh therefore maintain some of the strength.
In 2013, the new president will then take a hospital pass i.e. he/she will inherit a very messy set of GoK accounts...
No need to SHOUT btw.

Something about the field of economics in general.

http://www.bloomberg.com...gree-business-class.html

interesting. the fx/money supply link has been pretty strong recently largely because foreign currency deposits have been growing the money supply. let's conservatively say about 45% of the 21% y-o-y growth in M3 has been driven by fx related issues. There's a section on the CBK website called publications, under that there's a menu called 'times series data', from where you can download the 'deposit corporation survey' under monetary and financial statistics menu. it's a simple spreadsheet that can show you the breakdown of money supply since the 90s. All you need to look at is the ratio of foreign currency deposits to money supply over the last 4 months.

my understanding is the $600m is a 2 year foreign loan and is supposed to fund this financial years expenditure... so i can understand where kizee might be coming from concerning quick conversion (they really can't sit on it). Although i don't have confidence in the policy loosening too quickly, but uve got an interesting point that it's necessary for them to swap the $. The government accounts are indeed messy... let's hope the best for the next president.

Let me murk these rumors....

1. Loan has NOT yet been finalized, but probably (unless Treasury play hardball) will be by COB today

2. Goldman, Jp Morgan, Barclays, Deutsche?.... Not even close bro... but once the info gets out, there is one player that may surprise...

3. Pricing: Not that bad for a country with a 'B' and BB-(T&C) rating..