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USD/KES $ at 95
Rank: Chief Joined: 8/4/2010 Posts: 8,977
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KulaRaha wrote:And now, here come to press statements that mean nothing. I thought this new guy was smart?
CBK Press Release explain the muscular USD
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 1/3/2007 Posts: 18,097 Location: Nairobi
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 These sort of press statements rarely mean anything. The latest MPC statement was all about the positives & how all is well until the last paragraph! Then came the +1.33% increase in KBRR. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Veteran Joined: 2/10/2010 Posts: 1,001 Location: River Road
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I thought the first rule of central banking is never to let the market price in your actions. This is the equivalent of a wife saying we need to talk. I hope CBK realizes the market can smell fear(hot air) soon the speculators will start testing them. I would have gone with what Sirma was doing allow the speculators to accumulate speculative trades then burn them
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Rank: Elder Joined: 11/7/2007 Posts: 2,182
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What would happen if the CB's let the market play it self out? LOVE WHAT YOU DO, DO WHAT YOU LOVE.
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Rank: Elder Joined: 3/29/2011 Posts: 2,242
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kyt wrote:What would happen if the CB's let the market play it self out? I guess the exchange rate would stabilize at the real rate. The hign demand for USD is real. I went to a forex bureau last week and the cashier informed me she had an order for One million dollars from a client. I tried to negotiate a rate and she informed me she was making only Kshs 20 per 100 dollars, so their margins are quite low but volumes high, hence the forex market is quite lucrative. "Things that matter most must never be at the mercy of things that matter least." Goethe
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Rank: Member Joined: 8/17/2011 Posts: 207 Location: humu humu
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kyt wrote:What would happen if the CB's let the market play it self out? If word got out there that the cbk is not intervening,speculators, businessmen and banks would bid the dollar up. in the short term this could lead to serious price distortions that could harm the economy. Those advocating for no action from cbk dont know what they are saying.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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kaifastus wrote:kyt wrote:What would happen if the CB's let the market play it self out? If word got out there that the cbk is not intervening,speculators, businessmen and banks would bid the dollar up. in the short term this could lead to serious price distortions that could harm the economy. Those advocating for no action from cbk dont know what they are saying. I don't think anyone has stated the CB should do nothing. Rather the old methods need to change to manage the muscular USD. Flight to the USD will continue as long as euroland deposit rates are negative. The pound too is experiencing more deposit upscale coz of the same. So you have a dump euro deposits pile into USD and pound deposits scenario (Cyprus & Greece crazies not helping euro confidence). Until this scenario changes all currencies will continue to devalue vs the USD. Therefore weak economies that have bad macros will obviously take a hard knock from the USD strength. This is the puzzle that CBs and Treasury depts need to solve, but with creative methods. Old methods won't work!$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Rotich sees rising imports hurting shillingQuote:Treasury secretary Henry Rotich sees the gap between exports and imports widening in the next two years, further piling pressure on the shilling. Loud and clear. Good luck KES bulls. Your legs have been cut! $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 1/3/2007 Posts: 18,097 Location: Nairobi
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hisah wrote:Rotich sees rising imports hurting shillingQuote:Treasury secretary Henry Rotich sees the gap between exports and imports widening in the next two years, further piling pressure on the shilling. Loud and clear. Good luck KES bulls. Your legs have been cut! Let's HOPE that GoK stops using CBK to support the KES but leave interest rates at a level that allows local manufacturers and exporters to survive. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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hisah wrote:Rotich sees rising imports hurting shillingQuote:Treasury secretary Henry Rotich sees the gap between exports and imports widening in the next two years, further piling pressure on the shilling. Loud and clear. Good luck KES bulls. Your legs have been cut! The writing has been on the wall for a long long time, he should quit talking and start acting. "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: Elder Joined: 7/26/2007 Posts: 6,514
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Trouble looming: very high interest rates with a very weak local currency. Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 9/15/2006 Posts: 3,905
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KulaRaha wrote:Trouble looming: very high interest rates with a very weak local currency. Seems Thursday meeting is as good a motivator as any for CBK and its governor to force the exchange rate DOwn. mohawk Haircut: Usd/Kes closes at 101.410 (first time since 09-Jul, one and a half weeks ago)
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Yeah, at 15% overnight rates, the shilling will get some respite, temporarily. Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 9/15/2006 Posts: 3,905
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Meanwhile, the Usd/Kes becomes a political tool...
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Rank: Member Joined: 9/29/2010 Posts: 679 Location: nairobi
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maka wrote:http://www.businessdailyafrica.com/CBK-curbs-banks--daily-forex-trade-to-save-the-shilling/-/539552/2803268/-/10ievmi/-/index.html
Will this work? it wont do anything to strengthen the KES all it will do is give an undue advantage to banks with sizeable capital bases, net loser will be buyers/sellers of FX
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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kizee1 wrote:maka wrote:http://www.businessdailyafrica.com/CBK-curbs-banks--daily-forex-trade-to-save-the-shilling/-/539552/2803268/-/10ievmi/-/index.html
Will this work? it wont do anything to strengthen the KES all it will do is give an undue advantage to banks with sizeable capital bases, net loser will be buyers/sellers of FX Those sizeable banks are the main dealers @kizee1. Let's see. Test the mettle of the new CB. Last time it was closing the interest rate arbitrages.
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Rank: User Joined: 1/20/2014 Posts: 3,528
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kizee1 wrote:maka wrote:http://www.businessdailyafrica.com/CBK-curbs-banks--daily-forex-trade-to-save-the-shilling/-/539552/2803268/-/10ievmi/-/index.html
Will this work? it wont do anything to strengthen the KES all it will do is give an undue advantage to banks with sizeable capital bases, net loser will be buyers/sellers of FX Definately will favour the big boys who in any case have massive backing offshore!!!! Formal education will make you a living. Self-education will make you a fortune - Jim Rohn.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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FX blackmarket will go vertical... $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Member Joined: 9/29/2010 Posts: 679 Location: nairobi
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Othelo wrote:kizee1 wrote:maka wrote:http://www.businessdailyafrica.com/CBK-curbs-banks--daily-forex-trade-to-save-the-shilling/-/539552/2803268/-/10ievmi/-/index.html
Will this work? it wont do anything to strengthen the KES all it will do is give an undue advantage to banks with sizeable capital bases, net loser will be buyers/sellers of FX Definately will favour the big boys who in any case have massive backing offshore!!!! true, however the cost of shorting the KES with cbk rules of 2011 is painful, ultimately it will be very hard to enforce, FX delers r cheeky chaps
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