Looking forward to QE County Edition

Well they say business is not charity so yesterday I gave termination letters to employees asking not to come back next year and also told the landlord i wont need the premises next year. If CBK want to raise rates to 30% no need to do business just put the cash into government and hibernate till the good times return. I don't understand how CBK is raising rates yet there is no money in the economy, customers are not paying the invoices, there is no cash flow and the banks want their money.

I don't know what kind of business CBK thinks you can engage in with +30% returns in this market well apart from drugs and speculating on land.

GCL, hisah and the deal, congrats. CBK got it totally wrong earlier in the year and hasn't looked back since... All you need to know is banks lend at CBR+8%

This yr's banana republic economics has benefited only certain groups. The cash rich (read politically well connected) and Kenyans in the diaspora who've been able to exchange their $/€/£ held savings for fx rates the only ever dreamed, put the cash in t-bills and can now potentially withdraw the cash out of Kenya for a very handsome risk-free profit. Finally, the one or two savvy investors, who withdrew from the NSE at circa 4200 and have since been eating risk free cash courtesy of GoK.

A fool and his money will always part ways...

I totally agree. And now they're expected to pay at btwn 27-30% after yesterday's stupid decision. You cannot counter inflation with temporary CBR rate increases. How is that going to increase innovation or capital for new businesses and manufacturing? Will fuel and electricity prices come down? Will employers who operate on loans and overdraft increase employees wages? I don't think so.

The problem with this whole scenario is the word HOPE. CBK is hoping the persistent poorly thought rate hikes will reduce inflation. Wananchi are hoping the hikes and suffering are for a greater good. My crystal ball tells me we are sipping on poison that will have grave implications than we are seeing at the moment. Expect the following;
1. Sharp drop in tax revenue. Customs revenue
will remain on the decline as long as the
exchange rate is shit and rates are high.
2. In lieu of 1 expect near panic borrowing by
CBK in January when they discover government
is suddenly running out of cash. By March
next year this will be worse.
3. The next rate drop in January has to be a
drastic drop when CBK finally discover HOPE
is not returning results.
4. Unions are about to come out in the streets,
people are earning money which keeps loosing
purchasing power year on year, the paltry
salary raises can't keep up with inflation. 4. However the Omieri in the room is the many
SALARY LOANS employees, civil servants,
military and police officers have been
borrowing and the revised rates. This will
heighten the Union Clamor.
5. Banks and other institutions will start
laying off staff very soon. By April expect a
bit of momentum.
6. In the end, the campaigns for next year will
have a lot to do with the economy than ever
before.
7. Obax may walk out with a very poor legacy
much to his surprise. The majority don't
care about motorable highways if they can't
eat.
8. Ours is not a very financially literate society, therefore we should walk,guide protect our wananchi whenever they consume financial services. We shouldn't give them a reason to run for their dear lives. By raising rates the way we are doing we are scaring off these wananchi from the private credit space and you can bet they will be overly apprehensive going forward. The way it works with these people is that they rely on our word not financial and economic theorems. We are repeating the same blunder we did with Safcom shares and since then wananchi vacated the NSE. Now KQ and everyone else can't raise much needed capital. We have not had a full subscription since then.....I fear for banks relying on retail business it will be hard to get customers coming in for loans in future.

In essence we are f***ING up our economy with World bank theories that messed us up in the 90's