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CBK MPC Meet!!!
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Intelligentsia
#481 Posted : Monday, May 23, 2016 5:19:34 PM
Rank: Elder

Joined: 10/1/2009
Posts: 2,436
To a large extent the reduction was expected in view of USD stability, falling inflation and 5-month import cover - or are the right conditions being laid down for floating the 2nd Eurobond.


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lochaz-index
#482 Posted : Monday, May 23, 2016 6:42:09 PM
Rank: Veteran

Joined: 9/18/2014
Posts: 1,127
If the NSE20 can't muster a bounce above the 4,000 on the back of this rate cut that would imply serious liquidity issues in the economy. Ever since Imperial bank went under the cbk has tried to bolster banks liquidity via reverse repos but it only served to stall the market slide rather than reverse it altogether.

Interbank rate has still been below 5%(any leads on the activity since October?), tbill rate fell below the cbr after the cash crunch last year, KES has been relatively stable and the market has barely got a foothold on the 4,000 mark.

Bearing in mind the expansionary budget summary, will the rate cut be short-lived as we try to sort out our issues? All the external distress borrowing we have been doing of late is worrying but the alternative aka local borrowing is not without dire consequences ..ticking time bomb actually.

A bigger fiscal and current account deficit and we are back to square one or worse.
The main purpose of the stock market is to make fools of as many people as possible.
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  | | Edit by user: Monday, May 23, 2016 7:19 PM | Reason: Not specified
Emerger
#483 Posted : Monday, May 23, 2016 7:07:29 PM
Rank: New-farer

Joined: 12/1/2014
Posts: 45
Location: Nairobi
Intelligentsia wrote:
To a large extent the reduction was expected in view of USD stability, falling inflation and 5-month import cover - or are the right conditions being laid down for floating the 2nd Eurobond.




The rate cut was expected based on some evident factors.
Question now, how will this impact the coming times bearing in mind that oil has taken an upward trajectory including our ERA pricing, with the reverse repos over the last few months, low interbank rates the market might flood with liquidity lifting the inflation up again. The FED have signaled a possible rate hike that might strengthen the USD, the BREXIT is main global factor now and the impact it will bring along should the britons opt out.
Interesting times ahead which could tilt the global economy (rd markets) to sway sideways.
Keep an eye...
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murchr
#484 Posted : Monday, July 25, 2016 4:58:37 PM
Rank: Elder

Joined: 2/26/2012
Posts: 15,980
Retained at 10.5%
KBBR - 8.9% from 9.87%
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
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  | | Edit by user: Monday, July 25, 2016 4:59 PM | Reason: Not specified
Emerger
#485 Posted : Monday, July 25, 2016 6:11:14 PM
Rank: New-farer

Joined: 12/1/2014
Posts: 45
Location: Nairobi
murchr wrote:
Retained at 10.5%
KBBR - 8.9% from 9.87%


Good for the economy.
Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates.
Infact, most lenders will review their 'k' factor upwards to retain their total rate constant.
CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted.
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Pesa Nane
#486 Posted : Monday, July 25, 2016 10:20:08 PM
Rank: Elder

Joined: 5/25/2012
Posts: 4,105
Location: 08c
Emerger wrote:
murchr wrote:
Retained at 10.5%
KBBR - 8.9% from 9.87%


Good for the economy.
Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates.
Infact, most lenders will review their 'k' factor upwards to retain their total rate constant.
CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted.

Humbly disagree. CBK has done it's part. It is for me and you (market forces) to punish the wayward lenders by taking our business to the most competitive.

If you can visit 30 bazaars before buying a car, why not visit the same number of banks and compare their offering before borrowing?
Pesa Nane plans to be shilingi when he grows up.
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alutacontinua
#487 Posted : Wednesday, July 27, 2016 12:46:19 PM
Rank: Member

Joined: 3/23/2011
Posts: 304
Pesa Nane wrote:
Emerger wrote:
murchr wrote:
Retained at 10.5%
KBBR - 8.9% from 9.87%


Good for the economy.
Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates.
Infact, most lenders will review their 'k' factor upwards to retain their total rate constant.
CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted.

Humbly disagree. CBK has done it's part. It is for me and you (market forces) to punish the wayward lenders by taking our business to the most competitive.

If you can visit 30 bazaars before buying a car, why not visit the same number of banks and compare their offering before borrowing?


"If banks don't reduce their interest rates within 30 days from Today, some penalties will have to be enforced."

"We'll pressure them to lower their lending rates. I'm sure not too many banks will be willing to go head to head with the regulator."

Some of the comments from CBK Gov. press conference yesterday. Just wondering what reduction in rates he will deem respectable....
You dont have to be great to START but you have to start to be GREAT!!!!!!!!
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Impunity
#488 Posted : Wednesday, July 27, 2016 1:26:34 PM
Rank: Elder

Joined: 3/2/2009
Posts: 26,331
Location: Masada
alutacontinua wrote:
Pesa Nane wrote:
Emerger wrote:
murchr wrote:
Retained at 10.5%
KBBR - 8.9% from 9.87%


Good for the economy.
Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates.
Infact, most lenders will review their 'k' factor upwards to retain their total rate constant.
CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted.

Humbly disagree. CBK has done it's part. It is for me and you (market forces) to punish the wayward lenders by taking our business to the most competitive.

If you can visit 30 bazaars before buying a car, why not visit the same number of banks and compare their offering before borrowing?


"If banks don't reduce their interest rates within 30 days from Today, some penalties will have to be enforced."

"We'll pressure them to lower their lending rates. I'm sure not too many banks will be willing to go head to head with the regulator."

Some of the comments from CBK Gov. press conference yesterday. Just wondering what reduction in rates he will deem respectable....


For a bank currently offering rates of 23%, if it cuts by a "whopping" 4%, they will still be charging an arm and a leg...19% when compared to those lenders currently doing it at 14%.
Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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maka
#489 Posted : Wednesday, July 27, 2016 1:28:30 PM
Rank: Elder

Joined: 4/22/2010
Posts: 11,522
Location: Nairobi
Impunity wrote:
alutacontinua wrote:
Pesa Nane wrote:
Emerger wrote:
murchr wrote:
Retained at 10.5%
KBBR - 8.9% from 9.87%


Good for the economy.
Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates.
Infact, most lenders will review their 'k' factor upwards to retain their total rate constant.
CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted.

Humbly disagree. CBK has done it's part. It is for me and you (market forces) to punish the wayward lenders by taking our business to the most competitive.

If you can visit 30 bazaars before buying a car, why not visit the same number of banks and compare their offering before borrowing?


"If banks don't reduce their interest rates within 30 days from Today, some penalties will have to be enforced."

"We'll pressure them to lower their lending rates. I'm sure not too many banks will be willing to go head to head with the regulator."

Some of the comments from CBK Gov. press conference yesterday. Just wondering what reduction in rates he will deem respectable....


For a bank currently offering rates of 23%, if it cuts by a "whopping" 4%, they will still be charging an arm and a leg...19% when compared to those lenders currently doing it at 14%.

Still too high....
possunt quia posse videntur
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lochaz-index
#490 Posted : Wednesday, July 27, 2016 5:32:23 PM
Rank: Veteran

Joined: 9/18/2014
Posts: 1,127
alutacontinua wrote:
Pesa Nane wrote:
Emerger wrote:
murchr wrote:
Retained at 10.5%
KBBR - 8.9% from 9.87%


Good for the economy.
Challenge is the transmission of the reduction to the ultimate borrowers as the lenders are always reluctant to reduce their lending rates.
Infact, most lenders will review their 'k' factor upwards to retain their total rate constant.
CBK needs a way to also regulate/monitor the 'k' factor movement if at all the reduction is to be effectively transmitted.

Humbly disagree. CBK has done it's part. It is for me and you (market forces) to punish the wayward lenders by taking our business to the most competitive.

If you can visit 30 bazaars before buying a car, why not visit the same number of banks and compare their offering before borrowing?


"If banks don't reduce their interest rates within 30 days from Today, some penalties will have to be enforced."

"We'll pressure them to lower their lending rates. I'm sure not too many banks will be willing to go head to head with the regulator."

Some of the comments from CBK Gov. press conference yesterday. Just wondering what reduction in rates he will deem respectable....

Disturbing remarks by the governor. I expected better. As much as I am pro lower interest rates, issuing ultimatums and chest thumping/grandstanding is only going to stir up needless friction. There is just no floor for the bank stocks in sight.

CBR, KBRR, interbank (both horizontal and vertical) are all ineffective or hampered by one reason or the other. My bet is that even a CRR cut would achieve negligible results as things stand. It is pretty rich for the Cbk to expect some of these tools to translate into tangible gains knowing very well most of the issues are structural in nature.
The main purpose of the stock market is to make fools of as many people as possible.
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  | | Edit by user: Wednesday, July 27, 2016 5:33 PM | Reason: Not specified
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