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CBK MPC Meet!!!
Rank: New-farer Joined: 11/12/2012 Posts: 92
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wasipunguze interest rates ....wacha watu wakazwe kabisa ....this will increase capital inflows and strengthening of the KES.
alchemy of finance by the great Soros talks about this.
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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mwekez@ji wrote:hisah wrote:Trade deficit plus money supply, I'm still skeptical how inflation will be held sub 5% through 2013. Money supply is checked. M3 curve this year is not as steep as that seen last year M3 Statistics 'Kshs Billions' Jan 2011; 1,285 Oct 2011; 1,514 Growth; 17.8% Jan 2012; 1,506 Oct 2012; 1,703 Growth; 13.1% See the graph here (page 9) http://www.knbs.or.ke/news/lei102012.pdfAnd the economy is looking up >> Treasury projects 5.1pc growth in GDP by year end How will the GDP growth hit 5% with a leash on M3? With devolution next year, I expect stimulus to support that initiative. KRA is already behind targets.
www.tradingeconomics.com/kenya/money-supply-m3
www.goldonomic.com/inflation.htm
$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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guru267 wrote:hisah wrote:I'm still skeptical how inflation will be held sub 5% through 2013. @hisah it is no ones intention to keep inflation below 5%... Actually we are way below the CBKs target of 9%! I guess I now see the picture. They are creating room to stimulate later. They have a 600bps headroom.
Balancing that USD rate will be the prime headache.$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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GDP growing by the 5.1% means Q3 needs to top 6.4% and Q4 to top 6.8%. Yea, tough call that but they may just pull it off. CBK, Treasury and Rain Gods have no option but to join hands … M3 likely to continue on current growth curve, stimulus package will catapult economy, KRA unlikely to beat targets coz this is an election year and most bizs are on a wait and see before expanding. Rain Gods may not disappoint but EURO …. Tough picture but all said, the 5.1% is a pleasant welcome this year. Then we can happily jump to 6.5% next year, then … :d/ :d/ :d/
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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World Bank cuts Kenya 2012 GDP growth forecast, sees 2013 rebound - http://reut.rs/Vlm2rj
Quote:The World Bank said on Wednesday it had cut Kenya's economic growth forecast to 4.3 percent in 2012 from an earlier 5 percent due to the effects of high lending rates, before recovering to 5 percent in 2013.
Growth slowed sharply in the first half to 3.5 percent, as key sectors like construction sagged under the weight of high commercial lending rates that topped 25 percent after policymakers raised the central bank's rate to 18 percent to fight inflation.
The 5 percent growth prediction for 2013 will depend on a presidential election scheduled for March 4 conducted peacefully, the World Bank said. At least they've cut their ridiculous lofty GDP growth expectations. Now waiting for treasury's downward review as they swallow humble pies. KE GDP 2012 at 5.1% my foot! With those NSE firms already issuing profit warnings and KRA behind targets, who will push GDP to 5.1%? in 2012? Houdini math by FinMin... Next year is also tricky to achieve 5% that WB suggests since Q1 2013 will be on the backfoot due to the election lull. If a run off occurs the lull is extended by another month. Then we head for June budget. By the time that stimulus (if they treasury decides to stimulate - I expect them to do so) this will be hitting the econ in late Q2 2013 - early Q3 2013. That will be another year done with GDP sub 5%. So realistically 2014 is when things will start shaping up where we can expect GDP to hit 5% - 6% backed by the 2013 recovery momentum assuming elections don't throw a spanner in the works. $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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World Bank calls for further rate cut to boost growth - http://www.businessdaily...86/-/fryu17/-/index.html$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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… Was Treasury recently blindly projecting 5.1pc growth in GDP by year end, I doubt. … Is World Bank blindly cutting the GDP growth forecast to 4.3pc, I doubt. ... Am sitting back and watching how this conundrum puns out
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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KE econ outlook view by Jay Ireland (President GE Africa) - http://bit.ly/YEdnIe$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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Widening trade deficit still an eye sore - http://www.businessdaily...6/-/ialewy/-/index.html
Balancing that deficit gap as well as USDKES rate will be treasury's major headache. The incoming officials have their work cut out. If USDKES gaps up to 95 level, rate hikes will start again. Hiking rates in a slumping econ will be suicidal. Watch this closely as we head into 2013. $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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mwekez@ji wrote:… Was Treasury recently blindly projecting 5.1pc growth in GDP by year end, I doubt. … Is World Bank blindly cutting the GDP growth forecast to 4.3pc, I doubt. ... Am sitting back and watching how this conundrum puns out Treasury runs on overdraft as cash shortage persists - http://www.businessdaily...8/-/5iqbsg/-/index.html
Quote:Treasury continued to run an overdraft at the Central Bank of Kenya (CBK) for the fifth consecutive month in November, indicating difficult times for the government due to slow revenue collection.
As at the end of the month, the State had over-drawn Sh25.4 billion from its account with the CBK, which is the highest amount it is allowed to draw as per the 2012-13 financial year limit set by law.
Treasury data shows the government was running a funding deficit of as much as Sh49.4 billion as at the end of first quarter of the financial year ended September 30.
The pressure on the Treasury’s finances was reflected at the end of the first quarter’s financial report which showed tax collection alone was behind target by Sh31.7 billion, ministerial collections (appropriations-in-aid) were below target by Sh13.5 billion while grants from international donors failed to meet the mark by Sh4.2 billion.
The overdraft is supposed to be repaid by the end of each financial year, but occasions have arisen when the government has failed to settle, leading to an overdrawn account.
Domestic borrowing through Treasury bills and bonds has been slow as the government has sometimes rejected bids at the auctions as a way to ensure interest rates do not rise at a time when the Central Bank is keen on keeping them low to power the soft economic growth.
Central Bank Governor Njuguna Ndung’u has warned the Treasury against exceeding the borrowing limit.
My opinion: Fiscal discipline out of order!
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 2/23/2009 Posts: 1,626
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hisah wrote:mwekez@ji wrote:… Was Treasury recently blindly projecting 5.1pc growth in GDP by year end, I doubt. … Is World Bank blindly cutting the GDP growth forecast to 4.3pc, I doubt. ... Am sitting back and watching how this conundrum puns out Treasury runs on overdraft as cash shortage persists - http://www.businessdaily...8/-/5iqbsg/-/index.html
Quote:Treasury continued to run an overdraft at the Central Bank of Kenya (CBK) for the fifth consecutive month in November, indicating difficult times for the government due to slow revenue collection.
As at the end of the month, the State had over-drawn Sh25.4 billion from its account with the CBK, which is the highest amount it is allowed to draw as per the 2012-13 financial year limit set by law.
Treasury data shows the government was running a funding deficit of as much as Sh49.4 billion as at the end of first quarter of the financial year ended September 30.
The pressure on the Treasury’s finances was reflected at the end of the first quarter’s financial report which showed tax collection alone was behind target by Sh31.7 billion, ministerial collections (appropriations-in-aid) were below target by Sh13.5 billion while grants from international donors failed to meet the mark by Sh4.2 billion.
The overdraft is supposed to be repaid by the end of each financial year, but occasions have arisen when the government has failed to settle, leading to an overdrawn account.
Domestic borrowing through Treasury bills and bonds has been slow as the government has sometimes rejected bids at the auctions as a way to ensure interest rates do not rise at a time when the Central Bank is keen on keeping them low to power the soft economic growth.
Central Bank Governor Njuguna Ndung’u has warned the Treasury against exceeding the borrowing limit.
My opinion: Fiscal discipline out of order!
 Uncertainty is certain.Let go
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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At this rate more stimulus has to be pumped to reverse the econ slowdown - http://www.businessdaily...8/-/f3tto1z/-/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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CBK enters talks with Bank of S.Sudan (BSS) over currency exchange - http://www.businessdaily.../-/oh8l5xz/-/index.html This is a good move by CBK to steady the USD in/outflows (KE banks in S.Sudan) as S.Sudan is experiencing a USD shortage. That S.Sudan pound is expensive @ KES 25 (almost like UAE dirham) just due to oil... Me thinks a sharp repricing downwards will happen in 5yrs time and more when KE's hydrocarbons go online. Will KE banks in S.Sudan play the exchange opportunity (KCB & CFC Corporate financing) ... $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Elder Joined: 2/23/2009 Posts: 1,626
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I think they will at some point.Kenya is developing well financially.We're really starting to get serious on currency,interest,inflation rates...and the likes. Uncertainty is certain.Let go
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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Rank: Chief Joined: 5/31/2011 Posts: 5,121
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#Reading the tea leaves; Thus, 10th January 2013, MPC cuts CBR 
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Rank: Elder Joined: 1/27/2011 Posts: 1,777
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mwekez@ji wrote:#Reading the tea leaves; Thus, 10th January 2013, MPC cuts CBR And commercial banks follow suit. Will they?
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