Nipate
Forum => Kenya Discussion => Topic started by: gout on November 29, 2014, 01:44:07 PM
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With agricultural exports having already taken some blows..... Where else does Kenya get its foreign currencies ...NGOs, minerals,
what currency are we doing deals with China??
I think only Nelson Marwa in govt understands what terrorism means to Kenya ....Uhuru & Ruto need to get lessons
From trading restrictions to raising interest rates and selling dollars, Kenya has tried most everything to protect its currency to no avail.
The shilling slumped to 90.4 per dollar on Nov. 25, a level not seen since 2011, and is poised for a fifth straight annual decline. The chances of the currency tumbling to 100 in the next year have more than doubled in the past two months to 62 percent, options prices compiled by Bloomberg show.
Pressure on the shilling is building as attacks by Islamist militants devastate tourism and add to the effects of a slide in the price of tea, the east African nation’s biggest source of foreign earnings. The Islamist group al-Shabaab claimed responsibility for a bus attack in north-eastern Kenya this month in which 28 people died.
http://www.bloomberg.com/news/2014-11-27/terrorists-sink-kenya-s-shilling-on-tourism-concern-currencies.html
The upcoming economic data prints and the foreign exchange market developments are crucial for Kenya and the policymakers should be prepared to take bolder steps to keep the growth momentum.
Rating Fears
Moody's has already warned that the stable outlook on the country's B1 credit rating is under threat due to the deteriorating security situation there.
"An ongoing erosion of consumer, business and investor confidence risks lower growth, capital inflows and foreign exchange reserves, which would exert downward pressure on the country's B1 rating," the international rating agency said in its July newsletter.
http://www.ibtimes.co.uk/kenyas-shilling-plunges-terrorism-keeps-tourists-away-amidst-rising-inflation-rating-concerns-1462564
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Forex inflows and outflows:
The good so far:
USD-Loans (imf,wb, euro bond)-this has increased. China's SGR; then you have all grants and loans from EU and Japan. Jubilee scored big with SGR and Eurobond.
Remittances from around the world...increasing.
FDI -Directly like Hellios and through NSE share trading (fickel--buy and sell)
Horticulture and coffee doing good.
The bad:
Tea prices are down but thankfully volumes are up....
Tourism literally on it's knees.
Less and less AID money is coming in including in NGOS and UN. WFP has cut food ratios by half.
The ever increasing appetitie to import stuff...17B USD import versus 6B export.
Debt repyament must be in region 40B per month..or nearly 400B per annum...external (paid in USD or etc) must be more than half.
My prediction...it will stay in 90-95 until tea and tourism recover.
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Every world event is connected to foreign exchange.
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imagine the dollar today is hitthing 92 to kenya shilling !