Shilling Stabilising

[Okiya]

I'm actually quite stressed right now. What would you do in my position man?

Wacha stress. If you don't have immediate use of the money continue keeping it in dollars.

 

[The.Black.Templar]

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When did he campaign there is no evidence of that happening

 

[Okiya]

Do you know the difference between supporting an appreciating currency and supporting a depreciating currency ama you just love whining for the sake of it?

CBK is buying dollars from the market at a cheaper rate bolstering its reserves at the same time. That means the cost of repaying our debt is reducing.

When supporting a depreciating shilling, you are selling dollars into the market destroying your reserves which is what Uhuru did and Ruto is undoing because he is actually listening to professionals.

1.We are a net importer. A strong shilling is better as it makes imports cheaper, raw materials cheaper which translates to affordability of goods.

2. A strong shilling reduces debt burden.

3. You complain about reduced reserves. CBK recommends reserves of 4 months. Uhuru maintained that almost the entire 10 years.

 

[Denis Young]

1.We are a net importer. A strong shilling is better as it makes imports cheaper, raw materials cheaper which translates to affordability of goods.

2. A strong shilling reduces debt burden.

3. You complain about reduced reserves. CBK recommends reserves of 4 months. Uhuru maintained that almost the entire 10 years.

4 months is literally the MINIMUM recommended. That is like going to buy bread with only 60 bob in your pocket as if you might not find the price went up by a shilling overnight.

Also, ideally Kenya should focus on reducing imports, starting with food and edible oil and we should see those reserves grow beyond that minimium you are so proud of. Imagine how strong the shilling will be then.

 

[upepo]

I wouldn't bet on that if I were you! The issue with Kenya has been liquidity. Too many competing expenses (mostly debt) and very little resources to match them. That is why we have had salary hitches, and delayed disbursements from treasury. The biggest single payment of $2bn has now been resolved with the Eurobond refinancing.

That means we don't need to use our own FX reserves to pay it, which has then contributed to the reduced demand. This signal has triggered dollar hoaders to sell because there is no more upside in hoarding. They have essentially booked their profits.

The expectation therefore is that this trend will continue but under the careful regulation by CBK since volatility is equally bad.

The US is also expected to cut interest rates at some point soon, increasing dollar liquidity.

Furthermore, if republicans win the presidency, you can probably expect the Russia-Ukraine war to grind to a steady halt, but that analysis is for the long term, 2025.

The movements we are witnessing are transient and largely driven by fear rather than rationale, and should never be used to judge where the shilling stands. Considering that nothing has changed fundamentally, I would expect the shilling to resume on the same trend in a matter of weeks. Whatever the hoarders return will be taken up by businesses that had slowed down on imports. It is much safer to bet on the general trend rather than short-term spikes.

 

[Okiya]

4 months is literally the MINIMUM recommended. That is like going to buy bread with only 60 bob in your pocket as if you might not find the price went up by a shilling overnight.

Also, ideally Kenya should focus on reducing imports, starting with food and edible oil and we should see those reserves grow beyond that minimium you are so proud of. Imagine how strong the shilling will be then.

Just acknowledge that Uhuru maintained the minimum recommended.There's a reason why analysts came up with that figure.

Yes Kenya should focus on reducing on imports. But what will you manufacture here when the price of electricity is highest ever?

 

[Denis Young]

The movements we are witnessing are transient and largely driven by fear rather than rationale, and should never be used to judge where the shilling stands. Considering that nothing has changed fundamentally, I would expect the shilling to resume on the same trend in a matter of weeks. Whatever the hoarders return will be taken up by businesses that had slowed down on imports. It is much safer to bet on the general trend rather than short-term spikes.

Don't confuse the current short selling with the general sentiment. The expectation was Kenya would default and that was overriding everything. We had to go to IMF to stave the liquidity hitch. Now the liquidity problem is resolving as we speak and CBK is literally harvesting cheap dollars from the market. So which is this trigger that would cause the shilling to resume the trend?

Unless the KK government get greedy like Ghana and unravel their austerity measures I don't see how your logic tracks.

 

[bigDog]

Chief welcome back .Long time since I saw you post hapa .

Thanks chief. Was on a sabbatical

 

[bigDog]

I'm actually quite stressed right now. What would you do in my position man?

Vile @upepo amesema.

 

[bigDog]

Unatulia tu bila wasiwasi unless you needed the money tomorrow. The shilling will resume the 160 level a few weeks or months from now once the market is done with cowards.

Niaje fossil? Do I know you from another village? Ile ya akina ma-hegoats and other fossils.

 

[bigDog]

I'm in the midst of making my biggest purchase in real estate and from the time we started doing due diligence last week and today, I've possibly lost over half an M since I maintain a USD account. It's more stressful since we agreed with the developer to a discount based on the amount of deposit paid. Ferk. Inauma bana

Hapa Kuna shida. Can you delay without breaching your contract? This USD fad won't last beyond next week.

 

[Okiya]

When did he campaign there is no evidence of that happening

The fact that he endorsed Kibaki and supported his candidature in public that's campaign. Or what's your understanding of campaigning?

 

[Ole Waru]

The depreciation of the shilling against the dollar has been happening for years this trend cannot stop in a week

 

[The.Black.Templar]

The fact that he endorsed Kibaki and supported his candidature in public that's campaign. Or what's your understanding of campaigning?

Campaign means attending ndc going to the campaign trail

 

[mzeiya]

Hapa Kuna shida. Can you delay without breaching your contract? This USD fad won't last beyond next week.

I can only rely on word from my advocates that they're still doing background checks but then again, the volatility of the currency markets puts me in a very silly position. Noma manze.

 

[bigDog]

I can only rely on word from my advocates that they're still doing background checks but then again, the volatility of the currency markets puts me in a very silly position. Noma manze.

I understand that roller-coaster feeling! I don't admire your position. But confirm if the central bank bought dollars today. Check the social media and notice the frenzied panic selling that was orchestrated by a monkey herder!

 

[Okiya]

Campaign means attending ndc going to the campaign trail

So using your logic,we can conclude someone like Miguna didn't campaign for Ruto because he neither attended NDC nor was on the campaign trail. Yeah?

 

[Denis Young]

I can only rely on word from my advocates that they're still doing background checks but then again, the volatility of the currency markets puts me in a very silly position. Noma manze.

Is this you...

 

[bigDog]

Is this you...

Lesson: Never allow your business to absorb foreign currency fluctuations if you are not a knowledgeable person in fx!

 

[QuadroK4000]

I can only rely on word from my advocates that they're still doing background checks but then again, the volatility of the currency markets puts me in a very silly position. Noma manze.

What would those advocates do or prevent matters involving currency and sorts?