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The poor logic behind interest rate rise..

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pops		#1 Posted : Tuesday, November 15, 2011 2:31:22 PM
Rank: Member Joined: 9/13/2006 Posts: 123		well once again we are the victim of plain stupid economics. why were our interest rates increased? to regin in inflation via strengthening the kshs. what has been the effect? the kshs vs the usd had come down to 93 but prices are rising, as importers still have to face the brunt of paying 25% interest rates to finance their imports, as the recent example of the rise in fuel prices indicates. so where was the damn need to increase rates mr uhuru and ndungu? we could have kept the dollar at 100 so atleast our exports would have benefited, without hurting the masses of sme and mortgage borrowers. the cost of the government borrowing at 25% also means that we will be paying debts for generations. our stupidity never ceases to amaze me!
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Ali Baba		#2 Posted : Tuesday, November 15, 2011 3:12:48 PM
Rank: Member Joined: 8/29/2008 Posts: 573		POPS: We should put you in charge at the treasury after 2012 as a Financial Secretary!!
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guru267		#3 Posted : Tuesday, November 15, 2011 3:33:55 PM
Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi		I told wazuans inflation would not fall whether we liked it or not.. And the strength in the kshs is a very temporary reaction.. Ndungu's foolishness will be further exposed going forward!! Mark 12:29 Deuteronomy 4:16
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KulaRaha		#4 Posted : Tuesday, November 15, 2011 3:48:13 PM
Rank: Elder Joined: 7/26/2007 Posts: 6,514		Its already exposed: KENYA NET DOMESTIC BORROWING IN Q1 2011/12 AT 12.3 BLN SHILLINGS VS TARGET OF 49.8 BLN SHILLINGS KENYA - TOTAL REVENUE COLLECTION IN Q1 2011/12 AT 149.1 BLN SHILLINGS, OFF TARGET BY 30.2 BLN SHILLINGS This fool will have to pay 30%+ on bonds to get anyone to invest in his paper. Watch this space... Business opportunities are like buses,there's always another one coming
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guru267		#5 Posted : Tuesday, November 15, 2011 4:03:32 PM
Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi		KulaRaha wrote: This fool will have to pay 30%+ on bonds to get anyone to invest in his paper. Watch this space... That borrowing rate is unsustainable especially for short term T BILLS... I really do not know what the intended end game of CBK is but it looks like a very hard landing is in check.. Mark 12:29 Deuteronomy 4:16
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KulaRaha		#6 Posted : Tuesday, November 15, 2011 4:07:52 PM
Rank: Elder Joined: 7/26/2007 Posts: 6,514		guru267 wrote: KulaRaha wrote: This fool will have to pay 30%+ on bonds to get anyone to invest in his paper. Watch this space... That borrowing rate is unsustainable especially for short term T BILLS... I really do not know what the intended end game of CBK is but it looks like a very hard landing is in check.. Why would an institution investor give money to CBK at 16% on t bills when they can give to banks at 27% for the same tenor? Business opportunities are like buses,there's always another one coming
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StatMeister		#7 Posted : Tuesday, November 15, 2011 4:18:08 PM
Rank: Veteran Joined: 5/23/2010 Posts: 868 Location: La Islas Galápagos		KulaRaha wrote: guru267 wrote: KulaRaha wrote: This fool will have to pay 30%+ on bonds to get anyone to invest in his paper. Watch this space... That borrowing rate is unsustainable especially for short term T BILLS... I really do not know what the intended end game of CBK is but it looks like a very hard landing is in check.. Why would an institution investor give money to CBK at 16% on t bills when they can give to banks at 27% for the same tenor? Haiya, 27% is the rate the banks charge you. For that, they pay you 1%. A bad day fishing is better than a good day at work
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jerry		#8 Posted : Tuesday, November 15, 2011 4:24:11 PM
Rank: Elder Joined: 9/29/2006 Posts: 2,570		KulaRaha wrote: Its already exposed: KENYA NET DOMESTIC BORROWING IN Q1 2011/12 AT 12.3 BLN SHILLINGS VS TARGET OF 49.8 BLN SHILLINGS KENYA - TOTAL REVENUE COLLECTION IN Q1 2011/12 AT 149.1 BLN SHILLINGS, OFF TARGET BY 30.2 BLN SHILLINGS This fool will have to pay 30%+ on bonds to get anyone to invest in his paper. Watch this space... @pops, blame the IMF or are they going to assist in bridging the gap in tax collection @KulaRaha. The opposite of courage is not cowardice, it's conformity.
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josiah33		#9 Posted : Tuesday, November 15, 2011 5:29:26 PM
Rank: Elder Joined: 1/27/2011 Posts: 1,777		BLAME IT ON PROF.NDUNGU'S OL' SKOOL ECONOMICS.
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Liv		#10 Posted : Tuesday, November 15, 2011 8:17:35 PM
Rank: Veteran Joined: 11/14/2006 Posts: 1,311		People.... you need to have some patience. Inflation did not rise to 18% overnight. It has been building since Jan 2011. It cannot come down overnight. The Effect of the CBK actions will start showing in Jan 2012.... and it will take like another 1 year to see 1-digit inflation rate. Next month - Fuel prices are expected to be lower...as the exchange rate fell in Nov 2011...this will result in some easing of inflation. But CBK did not have many choices to control inflation... They had to raise the interest rates... . We only blame Prof Ndungu for doing this too late....and doing it too abruptly. They should have started raising the interest rates slowly in Dec 2010....that is the mistake they did.
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