Economic experts gather around

O

Okiya

Elder Lister
In just 9 days the world's best performing currency has depreciated by 6 bob.

What is happening @Denis Young @pop in @Kasaman

June itakuwa wapi?




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In January, World’s largest coffee trader, Neumann Gruppe, said it would close its Kenyan mill and unit that offered finance & marketing for small farmers due to govt decree forcing companies to chose either marketing or grinding beans (preventing them from doing both). Nestle which had considered increasing production is also cutting operations in Kenya due to increased regulations. - Bloomberg
 
At this point, no one seems very sure what the actual value of the shilling is despite the Forex market operating on a floating basis. My guesstimate is 150 to the $.
 
ION - Palm oil prices dropped by 12.7 percent in the last 16 days but you are unlikely to see a supermarket price reduction because of the weakening/unstable shilling.
 
Okiya said:
In just 9 days the world's best performing currency has depreciated by 6 bob.

What is happening @Denis Young @pop in @Kasaman

June itakuwa wapi?




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Common sense. We need to raise $500M for the final Eurobond payment in June. A sharp depreciation indicates a high demand for dollars, institutional even.

Put two and two together. This pull back is temporary. Try and speculate against the shilling and you will join those who did so when it dropped from 160.
 
Denis Young said:
Common sense. We need to raise $500M for the final Eurobond payment in June. A sharp depreciation indicates a high demand for dollars, institutional even.

Put two and two together. This pull back is temporary. Try and speculate against the shilling and you will join those who did so when it dropped from 160.
Click to expand...

After paying off the Eurobond where will the shilling stabilise at?
 
Imagine more debt making your currency gain against the dollar. Fake financial system founded on the fakest reserve currency printed out of thin air such that manipulating rates artificially makes currencies weaker or stronger and is completely normal.

Your currency's value should rise because more people want to participate in your economy because there are higher returns than elsewhere. Investors are leaving kenya because of taxes, regulation and corruption yet the shilling is gaining against the dollar. How long will the fake bubble last? Even US investors were on record the other day that business in kenya is conducted non-transparently and their court cases to contest questionable decisions are taking forever to conclude.

Yet the shilling is gaining. Let me guess, through prayers?
 
Okiya said:
After paying off the Eurobond where will the shilling stabilise at?
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First of all it is not about paying the Eurobond. The question here is dollar demand. The bond was the single most point of high dollar demand which is why speculation was so high.

Not sure we have another event that might trigger such sharp demand anytime soon. So under 130 by end of June feels like a reasonable rate.
 
Denis Young said:
First of all it is not about paying the Eurobond. The question here is dollar demand. The bond was the single most point of high dollar demand which is why speculation was so high.

Not sure we have another event that might trigger such sharp demand anytime soon. So under 130 by end of June feels like a reasonable rate.
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Our productivity is low so we are not earning much from exports. For the rate to go to 130 the CBR rate will need to be increased. That will hurt other sectors of the economy. If interest rates are maintained, dollar will be 140-150
 
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