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CBK MPC Meet!!!
Rank: Elder Joined: 10/1/2009 Posts: 2,436
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To a large extent the reduction was expected in view of USD stability, falling inflation and 5-month import cover - or are the right conditions being laid down for floating the 2nd Eurobond.
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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If the NSE20 can't muster a bounce above the 4,000 on the back of this rate cut that would imply serious liquidity issues in the economy. Ever since Imperial bank went under the cbk has tried to bolster banks liquidity via reverse repos but it only served to stall the market slide rather than reverse it altogether. Interbank rate has still been below 5%(any leads on the activity since October?), tbill rate fell below the cbr after the cash crunch last year, KES has been relatively stable and the market has barely got a foothold on the 4,000 mark. Bearing in mind the expansionary budget summary, will the rate cut be short-lived as we try to sort out our issues? All the external distress borrowing we have been doing of late is worrying but the alternative aka local borrowing is not without dire consequences ..ticking time bomb actually. A bigger fiscal and current account deficit and we are back to square one or worse. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: New-farer Joined: 12/1/2014 Posts: 45 Location: Nairobi
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Intelligentsia wrote:To a large extent the reduction was expected in view of USD stability, falling inflation and 5-month import cover - or are the right conditions being laid down for floating the 2nd Eurobond.
The rate cut was expected based on some evident factors. Question now, how will this impact the coming times bearing in mind that oil has taken an upward trajectory including our ERA pricing, with the reverse repos over the last few months, low interbank rates the market might flood with liquidity lifting the inflation up again. The FED have signaled a possible rate hike that might strengthen the USD, the BREXIT is main global factor now and the impact it will bring along should the britons opt out. Interesting times ahead which could tilt the global economy (rd markets) to sway sideways. Keep an eye...
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Rank: Elder Joined: 2/26/2012 Posts: 15,979
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Retained at 10.5% KBBR - 8.9% from 9.87% "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: New-farer Joined: 12/1/2014 Posts: 45 Location: Nairobi
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murchr wrote:Retained at 10.5%
KBBR - 8.9% from 9.87% Good for the economy. Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates. Infact, most lenders will review their 'k' factor upwards to retain their total rate constant. CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted.
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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Emerger wrote:murchr wrote:Retained at 10.5%
KBBR - 8.9% from 9.87% Good for the economy. Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates. Infact, most lenders will review their 'k' factor upwards to retain their total rate constant. CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted. Humbly disagree. CBK has done it's part. It is for me and you (market forces) to punish the wayward lenders by taking our business to the most competitive. If you can visit 30 bazaars before buying a car, why not visit the same number of banks and compare their offering before borrowing? Pesa Nane plans to be shilingi when he grows up.
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Rank: Member Joined: 3/23/2011 Posts: 304
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Pesa Nane wrote:Emerger wrote:murchr wrote:Retained at 10.5%
KBBR - 8.9% from 9.87% Good for the economy. Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates. Infact, most lenders will review their 'k' factor upwards to retain their total rate constant. CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted. Humbly disagree. CBK has done it's part. It is for me and you (market forces) to punish the wayward lenders by taking our business to the most competitive. If you can visit 30 bazaars before buying a car, why not visit the same number of banks and compare their offering before borrowing? "If banks don't reduce their interest rates within 30 days from Today, some penalties will have to be enforced." "We'll pressure them to lower their lending rates. I'm sure not too many banks will be willing to go head to head with the regulator." Some of the comments from CBK Gov. press conference yesterday. Just wondering what reduction in rates he will deem respectable.... You dont have to be great to START but you have to start to be GREAT!!!!!!!!
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Rank: Elder Joined: 3/2/2009 Posts: 26,325 Location: Masada
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alutacontinua wrote:Pesa Nane wrote:Emerger wrote:murchr wrote:Retained at 10.5%
KBBR - 8.9% from 9.87% Good for the economy. Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates. Infact, most lenders will review their 'k' factor upwards to retain their total rate constant. CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted. Humbly disagree. CBK has done it's part. It is for me and you (market forces) to punish the wayward lenders by taking our business to the most competitive. If you can visit 30 bazaars before buying a car, why not visit the same number of banks and compare their offering before borrowing? "If banks don't reduce their interest rates within 30 days from Today, some penalties will have to be enforced." "We'll pressure them to lower their lending rates. I'm sure not too many banks will be willing to go head to head with the regulator." Some of the comments from CBK Gov. press conference yesterday. Just wondering what reduction in rates he will deem respectable.... For a bank currently offering rates of 23%, if it cuts by a "whopping" 4%, they will still be charging an arm and a leg...19% when compared to those lenders currently doing it at 14%. Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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Impunity wrote:alutacontinua wrote:Pesa Nane wrote:Emerger wrote:murchr wrote:Retained at 10.5%
KBBR - 8.9% from 9.87% Good for the economy. Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates. Infact, most lenders will review their 'k' factor upwards to retain their total rate constant. CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted. Humbly disagree. CBK has done it's part. It is for me and you (market forces) to punish the wayward lenders by taking our business to the most competitive. If you can visit 30 bazaars before buying a car, why not visit the same number of banks and compare their offering before borrowing? "If banks don't reduce their interest rates within 30 days from Today, some penalties will have to be enforced." "We'll pressure them to lower their lending rates. I'm sure not too many banks will be willing to go head to head with the regulator." Some of the comments from CBK Gov. press conference yesterday. Just wondering what reduction in rates he will deem respectable.... For a bank currently offering rates of 23%, if it cuts by a "whopping" 4%, they will still be charging an arm and a leg...19% when compared to those lenders currently doing it at 14%. Still too high.... possunt quia posse videntur
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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alutacontinua wrote:Pesa Nane wrote:Emerger wrote:murchr wrote:Retained at 10.5%
KBBR - 8.9% from 9.87% Good for the economy. Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates. Infact, most lenders will review their 'k' factor upwards to retain their total rate constant. CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted. Humbly disagree. CBK has done it's part. It is for me and you (market forces) to punish the wayward lenders by taking our business to the most competitive. If you can visit 30 bazaars before buying a car, why not visit the same number of banks and compare their offering before borrowing? "If banks don't reduce their interest rates within 30 days from Today, some penalties will have to be enforced." "We'll pressure them to lower their lending rates. I'm sure not too many banks will be willing to go head to head with the regulator." Some of the comments from CBK Gov. press conference yesterday. Just wondering what reduction in rates he will deem respectable.... Disturbing remarks by the governor. I expected better. As much as I am pro lower interest rates, issuing ultimatums and chest thumping/grandstanding is only going to stir up needless friction. There is just no floor for the bank stocks in sight. CBR, KBRR, interbank (both horizontal and vertical) are all ineffective or hampered by one reason or the other. My bet is that even a CRR cut would achieve negligible results as things stand. It is pretty rich for the Cbk to expect some of these tools to translate into tangible gains knowing very well most of the issues are structural in nature. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Elder Joined: 3/2/2009 Posts: 26,325 Location: Masada
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maka wrote:Impunity wrote:alutacontinua wrote:Pesa Nane wrote:Emerger wrote:murchr wrote:Retained at 10.5%
KBBR - 8.9% from 9.87% Good for the economy. Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates. Infact, most lenders will review their 'k' factor upwards to retain their total rate constant. CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted. Humbly disagree. CBK has done it's part. It is for me and you (market forces) to punish the wayward lenders by taking our business to the most competitive. If you can visit 30 bazaars before buying a car, why not visit the same number of banks and compare their offering before borrowing? "If banks don't reduce their interest rates within 30 days from Today, some penalties will have to be enforced." "We'll pressure them to lower their lending rates. I'm sure not too many banks will be willing to go head to head with the regulator." Some of the comments from CBK Gov. press conference yesterday. Just wondering what reduction in rates he will deem respectable.... For a bank currently offering rates of 23%, if it cuts by a "whopping" 4%, they will still be charging an arm and a leg...19% when compared to those lenders currently doing it at 14%. Still too high.... Should be 8%, places like Kiash's and Gulf its a mere 4%. Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Veteran Joined: 4/4/2016 Posts: 1,996 Location: Kitale
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alutacontinua wrote:Pesa Nane wrote:Emerger wrote:murchr wrote:Retained at 10.5%
KBBR - 8.9% from 9.87% Good for the economy. Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates. Infact, most lenders will review their 'k' factor upwards to retain their total rate constant. CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted. Humbly disagree. CBK has done it's part. It is for me and you (market forces) to punish the wayward lenders by taking our business to the most competitive. If you can visit 30 bazaars before buying a car, why not visit the same number of banks and compare their offering before borrowing? "If banks don't reduce their interest rates within 30 days from Today, some penalties will have to be enforced." "We'll pressure them to lower their lending rates. I'm sure not too many banks will be willing to go head to head with the regulator." Some of the comments from CBK Gov. press conference yesterday. Just wondering what reduction in rates he will deem respectable.... i beg to disagree with this bill. What guarantee do they have that this action will result to lower npls? Towards the goal of financial freedom
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Rank: Veteran Joined: 8/10/2014 Posts: 953 Location: Kenya
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Impunity wrote:alutacontinua wrote:Pesa Nane wrote:Emerger wrote:murchr wrote:Retained at 10.5%
KBBR - 8.9% from 9.87% Good for the economy. Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates. Infact, most lenders will review their 'k' factor upwards to retain their total rate constant. CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted. Humbly disagree. CBK has done it's part. It is for me and you (market forces) to punish the wayward lenders by taking our business to the most competitive. If you can visit 30 bazaars before buying a car, why not visit the same number of banks and compare their offering before borrowing? "If banks don't reduce their interest rates within 30 days from Today, some penalties will have to be enforced." "We'll pressure them to lower their lending rates. I'm sure not too many banks will be willing to go head to head with the regulator." Some of the comments from CBK Gov. press conference yesterday. Just wondering what reduction in rates he will deem respectable.... For a bank currently offering rates of 23%, if it cuts by a "whopping" 4%, they will still be charging an arm and a leg...19% when compared to those lenders currently doing it at 14%. Different customer base and cost of funds
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Rank: Elder Joined: 3/2/2009 Posts: 26,325 Location: Masada
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Ebenyo wrote:alutacontinua wrote:Pesa Nane wrote:Emerger wrote:murchr wrote:Retained at 10.5%
KBBR - 8.9% from 9.87% Good for the economy. Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates. Infact, most lenders will review their 'k' factor upwards to retain their total rate constant. CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted. Humbly disagree. CBK has done it's part. It is for me and you (market forces) to punish the wayward lenders by taking our business to the most competitive. If you can visit 30 bazaars before buying a car, why not visit the same number of banks and compare their offering before borrowing? "If banks don't reduce their interest rates within 30 days from Today, some penalties will have to be enforced." "We'll pressure them to lower their lending rates. I'm sure not too many banks will be willing to go head to head with the regulator." Some of the comments from CBK Gov. press conference yesterday. Just wondering what reduction in rates he will deem respectable.... i beg to disagree with this bill. What guarantee do they have that this action will result to lower npls? If the BIG bankd refuse to lend SMEs (as argued) then small medium banks will sprout out to fil the vacuum. Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Veteran Joined: 11/11/2006 Posts: 970 Location: Home
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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Cbr is now a hot potato. By virtue of becoming the peg for interest rates, juggling it will be a most tortuous exercise for the CBK. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Elder Joined: 3/2/2009 Posts: 26,325 Location: Masada
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Holy cow!  Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 4/22/2010 Posts: 11,522 Location: Nairobi
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First meeting this year to be held today...Think they will hold the rate. possunt quia posse videntur
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Rank: Veteran Joined: 11/13/2015 Posts: 1,568
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maka wrote:First meeting this year to be held today...Think they will hold the rate. Talk about been caught between hard rock and deep blue sea. Will they act to save banking sector or sacrifice liquidity? I reckon screw the banks. Will see Equity n KCB in the teens soonest
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Rank: Elder Joined: 6/23/2009 Posts: 13,472 Location: nairobi
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wukan wrote:maka wrote:First meeting this year to be held today...Think they will hold the rate. Talk about been caught between hard rock and deep blue sea. Will they act to save banking sector or sacrifice liquidity? I reckon screw the banks. Will see Equity n KCB in the teens soonest Damn the banks, damn the economy!
HF 428,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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