hisah wrote:hisah wrote:Sufficiently Philanga....thropic wrote: The rate cut is welcome. But from a global perspective it feels a bit rushed. Brexit event looms in a few weeks while the USD bulls are now regaining power. Should events unfold sharply, the cbr cut will look like a mistake as KES gets squeezed by USD. MPC should have held the rate until brexit unfolds. Kenya overshoots domestic borrowing target by Sh100bn
The elephant in the room. The CB has blinked first by cutting cbr while gok has stayed put and refused to cut spending. KRA is behind collections and should expect the same this coming year. Gok is hoping against hope that donors and eurobond will plug those collection holes.
Strong usd will put the ice on eurobond. Cbr cut will weaken kes. Nobody is preparing for the next round of deflation effects that a strong usd is going to unleash.
When the usd pegs start breaking that reality check will strike hard. The recent euro/swiss peg break is just as small example of the chaos waiting to strike!
'Bidless' is going to become a common word...
Cbk and treasury still at loggerheads. Explains where the liquidity has been going to. Treasury plans hinge on hopes, hunches and guesses and Cbk is expected to clean up after its mess.
If all the heat/sabre rattling coming from kra is anything to go by then they will miss their targets by quite some distance. No reprieve for borrowers either and the economy will continue limping.
Euro bond or no euro bond? A rock and a hard place. Sub-prime sovereign debts spices up. The economy still gets knocked in the teeth and it will most likely be a slippery path from there...what with all the non-concessional borrowing, electioneering is already high in gear, tbill/bond yields acting up etc.
Once capital inflows which have kept our BoP respectable head the other way we will be left naked(KES, reserves et al). The longer they keep kicking the can down the road the harder we will come crashing.
The main purpose of the stock market is to make fools of as many people as possible.