Rank: Chief Joined: 8/4/2010 Posts: 8,977
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@Metasploit - Please try and do your own research instead of relying on the so called 'analysts'. These 'analysts' last year couldn't see the USDKES moving from 80 - 90 - 100 - and above yet it was so evident when inflation started rocketing with CBK fidgeting at their job.
By hiking CBR, the CBK tried to stem the KES weakening tide which worked for a while. I have asked this query before, if inflation is on a downward trend for 6 months, why is CBR still stuck in the sky at 18%? This year I have talked a number of buddies back in KE and it seems like 1000 for 2011 was better of than today in terms of spending power. So is the KNBS inflation rate a true picture of what is on the ground? How many luxurious items have you (and still continue) cut off your budget? As well as essentials intake have your reduced to balance your budget? Does that reflect a strong KES?
Treasury has got $600M so I expect the tbill to continue tumbling as GoK is funded for now and need not borrow from the market.
Now the big question what has moved USDKES from 82 to 86 and above (at the moment - 86.45)? Dollar demand? What is causing this abnormal dollar demand? Importers? Really? If it is a short term trend as the 'analysts' say, how short term is Jan to May to move USDKES from 82s to 86s?
KE has a worrying BoP scenario which needs to be fixed asap. But this will not be fixed by CBK moving in and out of the market using repos and selling dollars. No CB is larger than the market! Treasury needs to relook at the fiscal policies and sort out the mess. The longer they drag their feet, the more Mr Market will continue to punish the KES.
For now I only hope the EURKES will weaken below 100/- then my EURKES game will be on for 2013.
So as a foreigner, if tbill are tumbling and the KES is bleeding, why would I put my forex at the NSE?
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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