Amount of money borrowed was ksh.269bn and the interest was at around 6% on average
So if we are paying ksh.16bn that's in order

intervening thru voice brokers they had banned two weeks ago lol

anyway cbk is hell bent on saving the kes at the expense of the economy, note overnite rates are as high as 14pct,

kenyans face two realities 1. a weak currency and a moderately performing economy or 2. a strongish currency and a recession

if cb keep tightening short end thru TADs and FX interventions, short term rates will tick up and the yield curve will invert,( what does this point to class?)

For me CBK will hike the CBR next week. Three reasons;
1) We are a net importer and any currency depreciation has unfavorable effects on those manufactured commondities we get from wherever.

2) The second most important reason will be to allow banks to make some profit growth. A rate hike will reflect immediately on existing loans. Iam sure some banks have already prepared notifications to clients about the rate hike and are only waiting for the rate confirmation. This will guarantee them a better 2H since a rate drop is not reflected as fast.

3) With a rate hike, the other problem of excess liquidity will be sorted.

The economic circle turns ... look at what CBK have just done , they are trying to mop up currency and reduce cash flows to make the shilling stronger ... good idea , but wait , by doing this they just hurt Kenyan businesses who've borrowed and again savings just became even more attractive than start ups . Result start ups slow down borrowers default rate increases , expenses rise as costs forwarded to consumer . Many of the companies that borrowed in the first place to help themselves out now will look for ways to cushion themselves and a lot do it by layoffs. What is Kenyans source of Forex :

1. Agriculture - suffering as tea prices have dipped
2. Tourism - On its back looking at the sky and praying for a miracle

Foreign exchange inflows are down and don't forget kenya is a net importer so outflows will always be higher than inflows, then we have the Eurobond to pay and we've got speculators in the country hungry to make a killing on those 85-86 shilling worth of dollars there hoarding since they got them.

Why do you think the NSE has lost so much so quick , its because foreigners who've put their money in are leaving the market because there loosing money with the drop in value of the KSH ( even more outflows). Economics 101 the stock market is a beacon of the economies health . How many companies have declared meager growth or worse yet losses.

If the Government would like to see the economy boom allow the CMA to give SME's a chance to list and source funding from markets rather than only banks and i guarantee with the mergers and acquisitions that will result , yes we may loose 10-12% of SME's but we will grow in efficiency and productivity and quality.

@kizee1, what's driving up interest rates?

@kizee I forgot to ask about M3. How are the statistics?

not yet inverted but I predict it might, cbk is hell bent on keeping this ccy in check and the only short term tool they have is to dry up an illiquid mkt

Cbk will continue selling dollars to contain the slide!!!