Wazua
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Ksh at its weakest since it floated in 1994
Rank: Veteran Joined: 9/4/2009 Posts: 700 Location: Nairobi
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hisah wrote:@kizee - shorting KES with CBR at double digits will be tough biz. But the moment CBK is pressed to lower it (they have to print money esp political influence) with inflation still at double digits, shorting KES resumes pronto due to the rates mismatch... For now it is still murky trying to figure out which way to play. I'm waiting for the so called $600M loan boost to see the market effect. Internationally, the global oil price spike and a likely Greece default are creating a lot of fog to forecast a medium term outlook - this two events happening together will just crash the markets.
@hisah. CBR will come down next month, inflation marginally, but most importantly the $600m is being used on infrastructure-which means it's not being used for further intervention. Thus the shilling should floor with Kizee scenarios becoz... I seem to remember the CB beefing up reserve the other day, USD 150 m to be exact, was this not printed? “We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Scubidu wrote:hisah wrote:@kizee - shorting KES with CBR at double digits will be tough biz. But the moment CBK is pressed to lower it (they have to print money esp political influence) with inflation still at double digits, shorting KES resumes pronto due to the rates mismatch... For now it is still murky trying to figure out which way to play. I'm waiting for the so called $600M loan boost to see the market effect. Internationally, the global oil price spike and a likely Greece default are creating a lot of fog to forecast a medium term outlook - this two events happening together will just crash the markets.
@hisah. CBR will come down next month, inflation marginally, but most importantly the $600m is being used on infrastructure-which means it's not being used for further intervention. Thus the shilling should floor with Kizee scenarios becoz... I seem to remember the CB beefing up reserve the other day, USD 150 m to be exact, was this not printed? Great, just great... So time comes again to start placing USDKES bull targets...
Just seen this NTV video titled IMF's role in the depreciation of the shilling.
Quote:A sequence of seemingly unrelated events to the outside world starting back in 2009 may have led to the drastic depreciation of the shillings value against foreign currencies late last year. But could the seed of this crisis have been planted unwittingly by the International Monetary Fund?
https://www.youtube.com/...feature=player_embedded
BD article - http://www.businessdaily.../-/9gxeegz/-/index.html
$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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Kenyans on dollar salaries take pay cut as shilling gains. http://www.businessdaily.../-/158u0k1/-/index.html
Now the grand question is, if those earning in dollars have taken a pay cut, are those earning in KES on a pay hike? At some point last year KQ wanted to start charging local air tickets in USD. One of the two currencies is about to get exposed soon... $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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Finally the 50Billion ($600M) loan is here as per treasury. But someone is having a nagging feeling about high tbill rates and inflation may refuse to collapse from the current lofty levels because of... Quote:Surging costs of oil and predicted food shortages, however, remain a major risk to stability of the shilling and inflation rate, Prof Ndung’u said.
The cost of crude oil has shot to above $120 a barrel in the international markets due to rising tensions between the West and oil-rich Iran due to its nuclear energy ambitions. At least the reality has not escaped the policy makers - that's an encouraging sign. But calling for single digit inflation by end of 2012 like earlier before is not very smart perception management and just an outright lie. http://www.businessdaily...6/-/1193lkv/-/index.html$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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And many still bury their heads in the sand to the fact that an avalanche of Debt & Equity capital into SSA is increasingly gathering momentum. I wonder what to them builds up main-street/the Real economy. Anyway, the world will always have its fair split of Observers & Participants-Victims & Victors.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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In addition, why isn't the writer of that BD article smart enough to analyse the potential impact on FX rates when KE recieves that USD600M? That it could see USD/KES break the 80 handle into the upper 70s or higher? Wouldn't that mitigate and even lower Import Inflation?
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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And yes indeed the Met Dept.is right to forecast a dry spell because surely it is public knowledge that Q1 is seasonally a dry period followed by the long-rains in Q2 in Kenya. So what is this storm in a tea cup that BD is trying to play up unless making a buck off perpertuating ignorance.
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Rank: Veteran Joined: 4/30/2010 Posts: 1,635
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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As usual IMF recommending the 'best pills' after taking over... They want high lending rates to stay so that lending shrinks below 30%. So let's see this script, high lending rates, high oil prices, high inflation rates, more IMF austerity conditions will lead to further slowdown of the econ. As long as lending rates remain sky high, tbill rates will equal stay high. In an election period with no money printing, politicos will fight back. That tug of war will lead to parliament showdowns like the current finance bill... Quite interesting days ahead. http://www.businessdaily...6/-/iyxc95z/-/index.html$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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PSC report is just... No comment. 'International criminals in the name of speculators or hoarders' are also blamed for the 2011 spectacular KES nosedive. That report is such a taxpayers waste of time & funds. So do they expect the banks to payback the arbitrage windfall as well as the 'evil' speculators (KE & other banks etc). What a circus. Anyway how do we expect politicians to fix issues if they got no clue about them. Which reminds of how Greece is now finally 'saved' as well as euroland... http://www.businessdaily.../-/vn10q2z/-/index.html
@Kizee - Still waiting for CBK to pull the CBR reduction trigger before jumping on USDKES. Yet again another PSC meeting on the same in 2013... Maybe this time they'll extend the investigations to intl banks & IMF. $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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Finally the bankers respond to PSC's circus (suckers) report. I really hope CBR is lowered today by 200bps now that inflation is 'deflating'. As usual USDKES re-rate will be my trade. The canadian dollar cross CADKES may also behave like swiss franc - CHFKES last year. I patiently wait for the tea leaves to cook. http://www.nation.co.ke/...0/-/231117z/-/index.html$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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[quote=hisah]Finally the bankers respond to PSC's circus (suckers) report. I really hope CBR is lowered today by 200bps now that inflation is 'deflating'. As usual USDKES re-rate will be my trade. The canadian dollar cross CADKES may also behave like swiss franc - CHFKES last year. I patiently wait for the tea leaves to cook. http://www.nation.co.ke/.../-/231117z/-/index.html[/quote] So MPC refuse to play the CBR reduction ball. That should keep on USD vs KES down for the time being. Now we move to fuel prices for Mar and Apr. All the global oil contracts for Mar and Apr which were on high price rallies - Apr being the worst. So fuel prices will most likely be revised upwards in Mar and Apr and that should make inflation remain above 16.7%.
I wonder how the Q1 and H1 bank results will look like if CBR is maintained at this lofty heights up to June 2012. Should be interesting reading those tea leaves then...$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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Inverted yield curve - will be an interesting topic for a while. Treasury & bank cat fights... http://www.businessdaily...32/-/mmr108/-/index.html$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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Tunaomba CBK tafadhali ichapishe msimu wa mvua haraka upesi. Where the heck are those rainmakers to print the rain storms... I hope oil prices will not have exploded past $150/brl with food importation also on the import bill... The 2012 KE budget will be a tough balancing act. http://www.nation.co.ke/...8/-/1shwmz/-/index.html
$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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Clearly it is time to start cooking up inflation downwards by removing milk from food items... http://www.nation.co.ke/...00/-/338qeh/-/index.html$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: New-farer Joined: 4/19/2011 Posts: 49 Location: Nairobi
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[quote=hisah]Clearly it is time to start cooking up inflation downwards by removing milk from food items... http://www.nation.co.ke/...0/-/338qeh/-/index.html[/quote] what do you suggest of maize and veges?
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Anything going up needs to be cooked to force the rate down. But oil & elec bill inflation are uncookable... Has anyone seen how the UGX took a knock when their CB lowered the CBR? CBK can't dare do so else risking KES weakening & pressuring inflation up. Tough call this one with labour unrest piling up. $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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Going by oil price moves ERC will definitely hike fuel prices for the months of March & April. So will ERC kick me for stating the obvious...  Should KES start a slid with oil prices at the current levels, inflation will definitely print above 20%. There's so much CBK can do with their tools and hiking CBR at such a scenario would throw the econ in ICU. Bank stocks on a ticker... $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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