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Ksh at its weakest since it floated in 1994
Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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Kularaha-whilst I agree with you on efficiencies, I doubt whether there is the political will to carry measures to eradicate waste. Moreover, nobody has actually pinpointed which areas can be adjusted in the short-term to save us this cash. On fx controls think you need to get out a bit more. Maybe to Brazil, China, Indonesia, Malaysia, South Korea all countries that have successfully closed fx outlets to protect their currencies from undue downward or even upward pressure of hot money. Eventually, we Kenyans must buck up siringi by exporting more and importing less. It’s not going to happen without either outright ban on some products or higher import levies. This you can take to the bank. Sehemu ndio nyumba
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Rank: Member Joined: 3/10/2008 Posts: 301 Location: Abu Dhabi
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Maybe they could borrow a leaf from seasoned BoJ. http://www.reuters.com/a...n-idUSTOE68S07S20100929
....borrow, intervene heavily and aggressively till they find a new normal level of trading. But for this they have to wait for the European crisis to cool down, as the dollar rallying is yet to calm. Few days ago Japan raised the ceiling for "borrowing-for-intervention". Secondly, I think Ndung'u should avoid too much talk, and paraphrase Mukiha about the tiger that never declares its prowess? Plan a very effective strategy and ACT. Thirdly, Govt should really look at long term ways of reducing FX requirements which are currently negatively infinite - invest in agric, promote manufacturing companies to set up busn, etc Fourthly, postpone any foreign exchange payments by the govt by swapping forward, or using any other tools.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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USDKES - today @102.50 after banks' trading platforms got disconnected... Keep watching and let's wait for the committee report after 120days and see if USDKES will also be 120... $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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hisah wrote:USDKES - today @102.50 after banks' trading platforms got disconnected... Keep watching and let's wait for the committee report after 120days and see if USDKES will also be 120... lol..lets hope they dont have a spillover! if they take say 150 days we are done
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Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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Is Ksh100 the new norm? Sehemu ndio nyumba
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Rank: Member Joined: 9/29/2010 Posts: 679 Location: nairobi
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Mainat wrote:Is Ksh100 the new norm? yea why not, its all about acclimatizing
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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kizee1 wrote:Mainat wrote:Is Ksh100 the new norm? yea why not, its all about acclimatizing Exactly! Who says the shilling should be at 75, or 90? perhaps this is the true value of the shilling. Business opportunities are like buses,there's always another one coming
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Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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MPC meets kesho. I expect it to add another 50-75bps. Sehemu ndio nyumba
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Rank: Member Joined: 9/29/2010 Posts: 679 Location: nairobi
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Mainat wrote:MPC meets kesho. I expect it to add another 50-75bps. i wonder wat effect this mpc is expected to have
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Rank: Veteran Joined: 4/30/2010 Posts: 1,635
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Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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400bps rise just like that. Short-term, probably not much of an effect, but long-term I think banks will stand lending to private sector a little more and do less arbitraging nonsense that is pushing Ksh so low. Sehemu ndio nyumba
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Rank: Member Joined: 9/29/2010 Posts: 679 Location: nairobi
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Mainat wrote:400bps rise just like that. Short-term, probably not much of an effect, but long-term I think banks will stand lending to private sector a little more and do less arbitraging nonsense that is pushing Ksh so low. i strongly disagree, i think banks will tend to lend to only 1 custy whose name si GoK, this custy has never defaulted(at least not yet) and one need not go thru a lengthy appraisal process to justify the lending, we are officially headed to an economic abyss
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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I rarely say this but hey CBK is finally roaaring...
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Good hike. Also good for GoK paper interest rates for those buying these papers  Pole to Wanjiku, unsecured loans are out the window... http://af.reuters.com/ar...E7L52WB20111005?sp=true
Somehow I wonder if Ndungu is copying his Ug counterpart who also hiked the rates by 400bps yesterday... Both UGX and KES have taken it in the chin for too long with a very bullish inflation rate rally to boot... http://www.rttnews.com/C...aspx?Id=1726997&SM=1$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Member Joined: 2/8/2007 Posts: 808
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Unfortunately 400bps with strong likelihood of additional hikes in the next few weeks, is akin to clamping and squeezing the economy's balls. There is no way we can grow the economy at these rates. Ole wangu walio na mortgages from commercial banks, you may need to tighten the msipi for a few months. Please put aside a nest egg because base rates may just kick up in a few weeks.
Liquidity and money supply attributed to the retail/individuals have been growing quite fast (ave. 20%/annum) unfortunately almost all this growth is short term money and other hot monies.
As much as our inflation is supply side driven/mostly food driven, I will stick my neck out and postulate that at least 50% of our inflation is fueled by both hot and short term money. CBK has been encouraging this growth a bit carelessly. The result is that the economy is overheating from 4-5% growth which is nonsensical, unless someone is sleeping on the job. CBK has to have a deliberate policy of converting this growth into long term capital which is the only way we can sustainably grow the economy and create meaningful jobs. Allowing banks to lend for consumption at single or near single digit rates is very much encouraging drinking during working hours and hoping no one is likely to get high. Well almost always folks get high.
Fixing the currency is as easy as ABCD just introduce capital rules demanding more shareholder capital to support any FX loans owed to local and foreign banks and banks FX reserves beyond a certain threshold as part of risk based measures. The argument being should the FX currency risk suddenly materialize, the bank's capital could be wiped off by the amount of the loss which may prejudice local depositors and borrowers. Therefore if someone has the spine for the FX arm wrestle let them bring their bottle.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Record lows African parade... KES, TZS, UGX and now NGN... http://af.reuters.com/ar...E7L644S20111006?sp=true - Dear Prof Ndungu, you are not alone in this... Fighting a dollar squeeze is not easy since you don't control/print the dollar... Soon to join the camp, kwacha as Sata anti-corruption moves spook investors. Copper prices are taking a hit and will crash soon, hitting Zambia's mining revenues. The kwacha will definitely test and exceed 5252 all time low vs USD. $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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Anyone watching KES today? Getting hit by all ccys. GBPKES above 160... $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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Yep-watching annoyingly as GBP climbs above Ksh162. Should have waited a bit longer Sehemu ndio nyumba
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Yield curve...  T-bill 91 day weekly... The signal was flagged on auction #1903 - that was the rate money lenders to gok wanted the interest rates as inflation rate went above the cbk limit of 5%... http://www.centralbank.g...ills/WeeklyBills91.aspx
So will we see T-Bill 91 day interest rate break above 20%... Look at 2000, 1999, 1998, 1997, 1996, 1995 and the holy grail year 1993 when the rate spiked to 72.09%... Latest T-Bill 91 day auction interest rate was 14.83%. And investors are expected to put money in stocks or worse a bank savings account which as per cbk stats pays 1.37% interest (Aug 2011) and a deposit rate is 4.07% (Aug 2011). At this rate, just borrow from your saccos and buy those T-bills. They'll pay for your loans... Money goggles... $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Veteran Joined: 11/21/2006 Posts: 1,590
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At Ksh105.66 and heading to 106. GBP is now 165. Sehemu ndio nyumba
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Ksh at its weakest since it floated in 1994
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