Hata sikuwa nimeona that bold statement :D:D Enyewe your name checks out.
That bold statement is true but you don’t understand what happens if caps don’t work as intended. If reserves continue to fall after capping, do you know what’s next?? Capping is just the first line of defense. As I said before, don’t argue about things you don’t understand.
This is what happens if capping fails to generate desired results. CBK seizes all dollars in local banks and converts the dollar accounts into Ksh accounts. Kama bado hujaelewa rudi tuu shule gathee.
When forex reserves start falling sharply, CBK takes two steps to avoid going bankrupt:
Step 1: Currency controls:- It limits how many dollars you can buy or withdraw (from your USD account).
Step 2: Mandatory currency conversion:- It converts foreign currency accounts into local currency accounts by force.
Now you’re trying to twist my words to fit your narrative.
My argument was having a USD account is better as a counter measure to protect against the current inflation than a KES account.
Hii maneno ya CBK governor anaweza amka siku moja and convert all those accounts into Ksh accounts is just speculation and fear mongering. Bado hatujafika hapo.
Even if he does, if you have a foreign USD, you won’t be affected. In fact, it would be advantage to you because the demand of the dollar will shoot through the roof and you will get a higher exchange rate on the black market.
Right now, you can easily open a foreign USD account outside the country using your smartphone. And you get better parallel exchange rates than what the local banks offer.
Why would you open a USD account at a local bank and exchange the dollar at 113 to 116 when you can exchange it at 120?
Apa unaota aisee. You don’t really understand what you are talking about. In Argentina, the country literally froze citizens bank accounts. Why? Poor economic policy where they pegged their currency to the dollar. Economy collapsed as a result. Country went bankrupt. To prevent a complete collapse, they froze and partially limited how much each resident could withdraw from their account.
Can the above happen to Kenya? Not a chance. Kenya’s economy is still chugging. We are not in debt default like Argentina, where they could no longer borrow. They had choked all their credit lines.
You read too much American news and then apply such forecasts to Kenya. Because of inflation and rapidly rising housing prices, rents may double in the US. Not Kenya. If anything, a poor economy dictates rent reductions in 3rd world countries.