Why does CBK have dollar account in Fed Bank of US...it where forex are kept..when you sent money to kenya...USD doesn't get shipped here...it get bought..and equivalent Kshs is credited to your relatives account in Kenya.
Unless you wanted the money shipped in literally..there is no scandal here.
That might be so when money is sent to a relative, but let us note that:
(1) Not all CBK forex (US$ in this case) is held overseas (Federal Reserve Bank in the case of dollars). You can go to CBK right now and find a lot of forex there.
(2) The Federal Reserve routinely ships (literally) large amounts of dollar bills to overseas destinations.
But all that is a "by the by". Let's get to the main point:
Finally you might want to ask...why did treasury wire some money directly to CBK (initial 1billion USD) and why did last 999m not get wired.
Simple. There are times when CBK goes out to market to buy or sell dollars...to intervene on forex market and try to maintain USD-Kshs exchange rate....and it happens that CBK on that time...were out shopping to buy dollars..and they simply bought treasury dollars...and credited the Kshs consolidated account with money.
I have read several versions of this. I wish I could find one in understandable English. It is yet just another fuddle in a new version of Treasury's confusing explanations.
You ask:
why did treasury wire some money directly to CBK (initial 1billion USD) and why did last 999m not get wired.
What does it mean to "wire some money directly" to the CBK? By your own account, which, for the most part is largely correct, the foreign currency stays overseas and a local account somehow gets credited. What exactly do you think happened to the $395 million from he main sale and $815 million from the tap sale? Nobody has raised issues about those. (I return to this point below.)
Earlier, on this thread:
http://www.nipate.org/index.php?topic=2823.0Second: Has the money has been sitting in those banks all the time? From what I understand (via what Rotich said), part of the money was used to pay a US$ syndicated loan and the rest (most of it) was transferred to CBK and then dished out to ministries, for "development projects". So it seems to me that even if the trail starts with the "named banks", as indeed it should and must, the real place anyone ought to be looking is CBK and elsewhere in Kenya.
On the $999 million, the main question I would be asking is not why it was not "transferred" in the same manner as the rest. I would instead ask why it was sitting in a J P Morgan account for two months+.
But let's also take a closer look at the overall picture, and maybe RV Pundit can remove some confusion that ordinary folk, of which I am one, might have.
Treasury has been selling a line that has led many people to believe something like this:
* $395 million from the main sale got transferred to Kenya, or, as RV Pundit puts it, it was directly wired to CBK.
* $999 million from the main sale got transferred to the Federal Reserve.
* $815 million from the tap sale got transferred to Kenya, or, as RV Pundit puts it, it was directly wired to CBK.
and so people have been asking why the $999 million was "not transferred to Kenya", whatever that means.
Now, as a matter of fact, all of the money initially ended up in the Federal Reserve. It was simply transferred between J P Morgan & Citibank accounts and CBK account there. CBK then transferred some shillings into Treasury's account locally.
So, the explanation for the $999 million is that CBK bought dollars and paid Treasury in shillings. Why, with all the hullaballoo that has been raised this "explanation" has taken such a while is not clear, but I'll give it this: the extent to which it has been accepted shows that it is a "better" one that the rest. Still, the question that will arise in some minds is this: By what means did CBK give Treasury the equivalent of the other $395 million and $815 million? (Nobody transferred the shillings from New York to Nairobi.) Where did the equivalent shillings come from, and why was the source different for the other $999 million?
In other words the "explanation" for the "special handling" of the $999 million requires some explanation.
There is also another question that now seems to have been forgotten about the $999 million. I hope that too can now be clarified as we consider the source of the money transferred to Treasury. This is about an amount of Sh. 140 billion that appears in various papers:
* First Treasury showed it as "local borrowing".
* When somebody noted that that would leave that amount missing on the "domestic borrowing" side, somebody went back to the Treasury papers and added a footnote stating that it was shown as "domestic" but it was really Eurobond.
* Then it was pointed out that if it was domestic borrowing, then there was, again, that amount missing on the foreign side. So, which was it, domestic or foreign?
* Treasury then absurdly claimed that it was simultaneously both foreign and domestic, that such accounting was proper and claimed that IMF had done just that with the money. (As I noted on the other Eurobond thread, the IMF document that Treasury claimed in support stated the opposite.)
So, yes, Treasury does get credited with certain amounts that look right. But money appears to be missing, or not, depending on what one takes as the sources. Was money stolen? I really have no idea. But the "explanations" have certainly been more confusing that clarifying.
Topic: EURO BOND MONEY TRAIL: POLITICAL PUPPETS & THE GRAND PLOT (Read 10058 times)