Kenya risks foreign debt default

[Empedocles]

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Heading into an election year, the government should tread very carefully:

BNP Paribas warns Kenya risks foreign debt defaulthttp://www.businessdailyafrica.com/BNP-Paribas-warns-Kenya-risks-foreign-debt-default/539552-3308844-15buntkz/index.html

[RV Pundit]

Why do they think Kshs will weaken against the dollar. kenya has never defaulted and is not about to at it's strongest.

[Georgesoros]

No. There's not going to be a default. Kick the spending up a notch.

[Empedocles]

Why do they think Kshs will weaken against the dollar. kenya has never defaulted and is not about to at it's strongest.

I really don't know how to respond to that.

[RV Pundit]

The best I have seen is that USD will strengthen against all currencies this year as the EURO tanks. I doubt that will affect kenya that much - coz source of forex is diversitifed just like our economy. We don't depend on copper like Zambia or Gold/Oil like Ghana.

On the debt part - the best I have heard from the pesssimist is that SGR 4-5 billion usd - will be hard to repay - I think that is a mistaken view - SGR is going to pay for itself. Kenya Railways and their operator - China bridges & Rail - will ran the rail & use the revenues to pay off this debt - Treasury is essentially just a "gurantor" here. It not like 200B Eurobond that has to be paid directly by taxes.

I really don't know how to respond to that.

[hk]

After brexit the shilling was under pressure , the cbk spent $280m to defend the shilling and there was little movement. The reason being kenya has accumulated more than $7b in foreign currency reserve. Mind you kenya still has $1.5b in stand by loan from IMF incase of any external shock that it hasn't even accessed. So unless price of oil shoots up to $100 kenya I don't think is  going to default or its currency isn't going to depreciate significantly.

[Georgesoros]

No amount of pressure will affect the Kenyan economy. People send billions from Abroad and that is enough to cushion the economy for a long time, or Until their finish the projects.

 

After brexit the shilling was under pressure , the cbk spent $280m to defend the shilling and there was little movement. The reason being kenya has accumulated more than $7b in foreign currency reserve. Mind you kenya still has $1.5b in stand by loan from IMF incase of any external shock that it hasn't even accessed. So unless price of oil shoots up to $100 kenya I don't think is  going to default or its currency isn't going to depreciate significantly.