Below are the long term charts of the EAC currencies - KES, UGX and TZS. USD vs TZ and UG currencies has already broken out of the long term all time highs resistance last posted in 2011. USDKES is heading there too.

Foreign debt servicing will definitely balloon as the EAC currencies devalue rapidly as per the chart patterns! Current account deficit will be a big headache as the import bill blows up as well as the expected inflation spike.

Brace for impact! This liquidity squeeze will not be funny.

USDKES


USDTZS


USDUGX


If the US Fed hikes the USD funding rate later this year, frontier and emerging market equities will get a rude selloff!

@hisah, the dollar might also go through a crisis of confidence. The QE and derivatives are still a ticking time bombs. Its not over until the fat lady sings

Btw how many KE banks and insurance firms have expanded in EAC? With the EAC econs headed for a slump those earnings will be crimped whichever way...

cbr up 150basis points.
NSE bulls be forewarned.

Fair warning, drastic actions

That 150bps CBR rate hike is shock therapy for KES bears. But why such a drastic hike when the econ is already on a slump since Q4 2014? Recession nightmare coming soon! All those profit warnings and profits dips that have been announced will definitely turn to losses since the weak econ legs have been chopped off.

@mnandii, though the market is oversold the shock of that rate hike will not offer any support at 4700. I think the market will break below that level for an extended slide towards 4400-4500 before any meaningful bounce. Perfect storm as the bull trap tightens with the econ sails facing headwinds.