Needless 2 say. Shorted

@cde thinking is always out of tune...atleast he stopped thinking KCB everyday...

Banks must be in a tight squeeze. Can't sell t-bills which they converted into htm stock; can't access interbank due to the steep price. And the lender of last resort is playing hardball.
Hope we are not heading to some liquidity crunch...

Ok...let me break it down 4 the mortals . The total banking sector deposits are KES.1T. The CRR mandates the banks to park 4.75% of 1T with the CBK at any 1 time. Now, with the latest rules the CBK has allowed the banks to drawdown at most 1.75% off the CRR as long as they close the month at the statutory 4.75%. Thus, simple computation is that 1.75% of KES 1T = 17.5B of available liquidity. Get it?

@mainat a bank drawing down its own CRR costs 0%. So I view this as a 3rd option on top of the Interbank and Discount Window. Thus, if I were a bank i'd approach it from the least cost option 1st; that should ease pressure off the interbank and discount rates somewhat. Let's see.