Yesterdays auction on the 91 day treasury bills yielded 12.65bn. Last weeks yielded 7.85bn. Thats an increase of over 4.8bn. Rates went up to 14.86%.

Instead of keeping money in the bank, the logical thing for depositors is to put it into the bills.

This action is likely to mop up excess liquidity from the market. Cost of loans will go up and will eat into people's incomes. Spending reduces, people spend only on basics, and less on luxuries. Its a tough time to be in the business of luxuries. Inflation will be curbed, not so sure about the Fx rate.

Economy will grow at a less rate, due to high cost of capital.

For those attributing the depreciation of the shiling on the imbalance of imports vs exports, a qn for you. Kenya has always been a net importer. ALWAYS. That hasn't changed. Our Balance of Payments has always been tilted one way, so what has changed in this fundamental to warrant the the depreciation?

The following article appearing in the Daily Nation talks of everything that has gone wrong to get us to this point

http://www.nation.co.ke/Feature...12/-/bg08b4/-/index.html

fuel prices are high because of the fall in the shilling and rising crude globally..

food prices are high due to the prevailing drought...

power prices are high because of the prevailing drought..

housing prices are high due to inadequate supply to meet demand...

MY QUESTION IS: Which of these high prices can you curb by raising the bloody bank rate??

im starting to doubt the quality of Ndung'us Phd..

Policy failure. CBK is not in charge of the production and trade process. Ministries are

It's good to see everybody come out and say this and that...