Wazua
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Kenya Economy Watch
Rank: Elder Joined: 3/19/2013 Posts: 2,552
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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World Bank roots for weaker shilling to boost exports “A 10-per cent depreciation of the shilling will improve the trade balance by 4.6 per cent in domestic currency terms or 5.6 per cent in foreign currency terms,” said the World Bank in the report titled Kenya Economic Update: Time to Shift Gears. “We need to let the Kenya Shilling depreciate gradually, not suddenly as happened in 2011. The fundamentals do not support a strong shilling. When you look at the current account, you find that at over 10 per cent, it is very high,” said Peter Wachira, senior investment manager at PineBridge Investments East Africa, in an earlier interview. “One of the important functions of the exchange rate is to correct trade imbalances. Other countries have devalued their currencies for the purposes of raising exports and curbing imports. We can also correct our trade imbalance by devaluing,” said an economist. http://www.businessdailyafrica....4/-/vmspuqz/-/index.html
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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mwekez@ji wrote:World Bank roots for weaker shilling to boost exports “A 10-per cent depreciation of the shilling will improve the trade balance by 4.6 per cent in domestic currency terms or 5.6 per cent in foreign currency terms,” said the World Bank in the report titled Kenya Economic Update: Time to Shift Gears. “We need to let the Kenya Shilling depreciate gradually, not suddenly as happened in 2011. The fundamentals do not support a strong shilling. When you look at the current account, you find that at over 10 per cent, it is very high,” said Peter Wachira, senior investment manager at PineBridge Investments East Africa, in an earlier interview. “One of the important functions of the exchange rate is to correct trade imbalances. Other countries have devalued their currencies for the purposes of raising exports and curbing imports. We can also correct our trade imbalance by devaluing,” said an economist. http://www.businessdailyafrica....4/-/vmspuqz/-/index.html Yet again this article appears a week later. So a weak KES will boost exports for a net importing nation?! 1+1 = 11 indeed... Debase KES, manufacturers get knocked by a higher import bill, inflation spikes, production dips, econ dips, job cuts, but hey exporters (horticulture etc) save the day... Really?! Zero sum game on that current account deficit issue. Remember that VAT bill has not been factored in i.e. its inflation effects.
What a fantastic idea to devalue the KES instead of coming up with practical fiscal policies and boosting manufacturing, infrastructure as well as agri economy.
Once again this is a hogwash article...$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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hisah wrote:mwekez@ji wrote:World Bank roots for weaker shilling to boost exports “A 10-per cent depreciation of the shilling will improve the trade balance by 4.6 per cent in domestic currency terms or 5.6 per cent in foreign currency terms,” said the World Bank in the report titled Kenya Economic Update: Time to Shift Gears. “We need to let the Kenya Shilling depreciate gradually, not suddenly as happened in 2011. The fundamentals do not support a strong shilling. When you look at the current account, you find that at over 10 per cent, it is very high,” said Peter Wachira, senior investment manager at PineBridge Investments East Africa, in an earlier interview. “One of the important functions of the exchange rate is to correct trade imbalances. Other countries have devalued their currencies for the purposes of raising exports and curbing imports. We can also correct our trade imbalance by devaluing,” said an economist. http://www.businessdailyafrica....4/-/vmspuqz/-/index.html Yet again this article appears a week later. So a weak KES will boost exports for a net importing nation?! 1+1 = 11 indeed... Debase KES, manufacturers get knocked by a higher import bill, inflation spikes, production dips, econ dips, job cuts, but hey exporters (horticulture etc) save the day... Really?! Zero sum game on that current account deficit issue. Remember that VAT bill has not been factored in i.e. its inflation effects.
What a fantastic idea to devalue the KES instead of coming up with practical fiscal policies and boosting manufacturing, infrastructure as well as agri economy.
Once again this is a hogwash article...  "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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murchr wrote:hisah wrote:mwekez@ji wrote:World Bank roots for weaker shilling to boost exports “A 10-per cent depreciation of the shilling will improve the trade balance by 4.6 per cent in domestic currency terms or 5.6 per cent in foreign currency terms,” said the World Bank in the report titled Kenya Economic Update: Time to Shift Gears. “We need to let the Kenya Shilling depreciate gradually, not suddenly as happened in 2011. The fundamentals do not support a strong shilling. When you look at the current account, you find that at over 10 per cent, it is very high,” said Peter Wachira, senior investment manager at PineBridge Investments East Africa, in an earlier interview. “One of the important functions of the exchange rate is to correct trade imbalances. Other countries have devalued their currencies for the purposes of raising exports and curbing imports. We can also correct our trade imbalance by devaluing,” said an economist. http://www.businessdailyafrica....4/-/vmspuqz/-/index.html Yet again this article appears a week later. So a weak KES will boost exports for a net importing nation?! 1+1 = 11 indeed... Debase KES, manufacturers get knocked by a higher import bill, inflation spikes, production dips, econ dips, job cuts, but hey exporters (horticulture etc) save the day... Really?! Zero sum game on that current account deficit issue. Remember that VAT bill has not been factored in i.e. its inflation effects.
What a fantastic idea to devalue the KES instead of coming up with practical fiscal policies and boosting manufacturing, infrastructure as well as agri economy.
Once again this is a hogwash article... Come on mates, currency devaluation will make our good cheaper to foreigners hence encouraging exports. It will also make imports expensive hence reducing import of unnecessary goods and services. This will be good for current account. …. and note the country is not applying currency devaluation in isolation. The country is encouraging local production, check the infrastructure developments and the improving production environment
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Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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Economic growth at even 5.4% in 2013 will be a tall order for digital gava. When the economy grows by 3% that is the level it is matching with the population growth.So in real terms when the economy grows at 5% real growth is at 2% when u exclude population growth. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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This is borrowed money the level of debt Kenya is taking is growing at an alarming rate; http://www.businessdaily...6/-/y371k2/-/index.html
Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI
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In the budget speech by Treasury Secretary Rotich;he announced that the gava will be spending ksh.18 billion per month in repaying the public debt Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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@Ericsson, dont expect government to stop taking debt until ke-oil starts flowing when things will somehow change
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