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How CBK fought and Lost the Inter-banking Lending Market Wars
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the deal
#1 Posted : Wednesday, September 07, 2011 2:23:22 PM
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Cde Monomotapa
#2 Posted : Wednesday, September 07, 2011 2:35:38 PM
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* Interbank lending, discount window rates fall

Kenya interbank rate falls to 10.4006 percent

http://af.reuters.com/ar...p;feedName=investingNews
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the deal
#3 Posted : Wednesday, September 07, 2011 2:39:18 PM
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[quote=Cde Monomotapa]* Interbank lending, discount window rates fall

Kenya interbank rate falls to 10.4006 percent

http://af.reuters.com/ar...;feedName=investingNews[/quote]

Yep after the Banks showed him (Govnr) who is the student...what a flawless victory for the bankssmile
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Kaykay
#4 Posted : Wednesday, September 07, 2011 2:40:58 PM
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Actually it is at 12% from 14% and they are using a moving average to arrive at that
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Cde Monomotapa
#5 Posted : Wednesday, September 07, 2011 2:45:52 PM
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the deal wrote:
[quote=Cde Monomotapa]* Interbank lending, discount window rates fall

Kenya interbank rate falls to 10.4006 percent

http://af.reuters.com/ar...;feedName=investingNews[/quote]

Yep after the Banks showed him (Govnr) who is the student...what a flawless victory for the bankssmile

LoL!! it is public knowledge that CBK closed the arbitrage on the Discount Window being pegged to the CBR and after punishing the banks CBK turned the tables and now the discount window is pegged above the inter-bank.
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the deal
#6 Posted : Wednesday, September 07, 2011 2:47:56 PM
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Kaykay wrote:
Actually it is at 12% from 14% and they are using a moving average to arrive at that

Laughing out loudly Laughing out loudly Laughing out loudly after being taught who is the bigger man he is now resorting to moving averages...his ego must be bruised i cant wait for his next press conference and the big 5 will have all the liquidity to sink the shilling if i had the $$$$ i will go against him and see how far he is willing to play with the economy...
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Cde Monomotapa
#7 Posted : Wednesday, September 07, 2011 2:52:58 PM
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kizee1
#8 Posted : Wednesday, September 07, 2011 3:00:42 PM
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the deal wrote:
Kaykay wrote:
Actually it is at 12% from 14% and they are using a moving average to arrive at that

Laughing out loudly Laughing out loudly Laughing out loudly after being taught who is the bigger man he is now resorting to moving averages...his ego must be bruised i cant wait for his next press conference and the big 5 will have all the liquidity to sink the shilling if i had the $$$$ i will go against him and see how far he is willing to play with the economy...


a movin average over an unspecified period?
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hisah
#9 Posted : Wednesday, September 07, 2011 3:06:27 PM
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And hoping that rains will ease the inflation rates... I'm still marveling at this financial instrument called 'hoping for rains to fall'...Pray Brick wall
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Cde Monomotapa
#10 Posted : Wednesday, September 07, 2011 3:12:40 PM
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hisah wrote:
And hoping that rains will ease the inflation rates... I'm still marveling at this financial instrument called 'hoping for rains to fall'...Pray Brick wall

and that is simply because agriculture in Kenya still depends on good rains and has a direct bearing on food inflation. The CBK has no control over that. @hisah u of all people should understand that.
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kizee1
#11 Posted : Wednesday, September 07, 2011 3:16:37 PM
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Cde Monomotapa wrote:
hisah wrote:
And hoping that rains will ease the inflation rates... I'm still marveling at this financial instrument called 'hoping for rains to fall'...Pray Brick wall

and that is simply because agriculture in Kenya still depends on good rains and has a direct bearing on food inflation. The CBK has no control over that. @hisah u of all people should understand that.

do u work for cbk?
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Cde Monomotapa
#12 Posted : Wednesday, September 07, 2011 3:20:34 PM
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No I don't @kizee1.but basic thinking should lead to basic conclusions. If one is born and bred in Kenya and is over the age of majority, then U should atleast have a basic understanding of how ur country works.
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the deal
#13 Posted : Wednesday, September 07, 2011 3:22:25 PM
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@Cde read what i write i'm no alarmist...there are two inflations here..imported inflation cos of the weak KES and then supply shock i.e drought.imported inflation can be stopped with a proper monetary policy...supply shock CBK has no power over...smile smile
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Cde Monomotapa
#14 Posted : Wednesday, September 07, 2011 3:23:53 PM
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Even Wanjiku knows it takes rain to grow food in Kenya. She is doing better than a lot pple posing as " Kenyan investors" on Wazua.
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Cde Monomotapa
#15 Posted : Wednesday, September 07, 2011 3:29:12 PM
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Questions as to why we still rely on rain-fed agriculture and not irragation at this day & age should be directed to the Fiscal Planners at Treasury and not Monetary Planners at CBK. (I too, as educated as I am, is still waiting for rain just like my greatest grandfather)
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VituVingiSana
#16 Posted : Wednesday, September 07, 2011 3:30:23 PM
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Did ndungu just learn that the Discount Window rate should be higher than the rate paid on T-Bills?

I thought he was going to blame KK again. Or is he still working on the letter or speech to be given on 14 Sep?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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kizee1
#17 Posted : Wednesday, September 07, 2011 3:36:03 PM
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Cde Monomotapa wrote:
Questions as to why we still rely on rain-fed agriculture and not irragation at this day & age should be directed to the Fiscal Planners at Treasury and not Monetary Planners at CBK. (I too, as educated as I am, is still waiting for rain just like my greatest grandfather)



u aware cbk printed KES 112 bn odd to shroe up FX reserves? dont u think this amount of money would cause inflation?

the supply side shocks( those of note) are mainly energy related, food costs went up due to higher input costs ocassioned y imported inflation, if there were shortages of food why are there instances of waste all over the country?
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Cde Monomotapa
#18 Posted : Wednesday, September 07, 2011 3:37:45 PM
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VituVingiSana wrote:
Did ndungu just learn that the Discount Window rate should be higher than the rate paid on T-Bills?

I thought he was going to blame KK again. Or is he still working on the letter or speech to be given on 14 Sep?

Maybe we should be schooled on what the purpose of the interbank and discount window rates are for. They are overnight borrowings for banks to balance their Cash Reserve Ratios (CRR) at CBK, which has now been reviewed to on a monthly basis. In normal times banks lend each other at 1% regardless of what rate the t.bill rate is or what they are charging their customers. Those are banksters for you.
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VituVingiSana
#19 Posted : Wednesday, September 07, 2011 3:42:42 PM
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The rate at the Discount Window should be punitive (or at least high enough to prevent CBK being the Lender of First Resort) so why did the idiots at CBK price the Disc Window at less than the T-Bill rate?

No wonder banks arbitraged!

Then CBK went overboard like a drunk driver swerving all over the road!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Kaykay
#20 Posted : Wednesday, September 07, 2011 3:43:18 PM
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@Cde, that is a valid point regarding the rains.
On another note the CBK says that it is trying to drive the agribusiness in attaining food sufficiency and VISION 2030, should they try and encourage banks to come up with tailor made products to support agriculture and other economic drivers such as tourism? Is it possible?
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