In a statement quoted on Bloomberg, IMF said that the local unit is 17.5% over-valued, meaning that a 100 shilling note is not worth the paper it is printed on and should buy items that are only worth Sh83.5.
Assuming IMF is right, the shilling being overvalued by 17.5 percent means an extra 17.5 KES on exchange rate. Multiply that by $25bn of foreign debt & National Debt goes up ~ 440bn in KES terms or an extra 6% on debt/gdp ratio. Looks like CBK has an eye on the debt metrics.
Overvalued means is propped up eg at 101 but it’s true value is less at 118 shillings to USD.
IMF wakwende zao…shaitan hao
Tough times ahead guys once masks fall off watu wataumia…imagine another 18% increase in fuel and imports… Tayarisheni lube… Kenya ni kuhama :D:D:D:D
Treasury has been secretly printing money to adjust this… Itagonga wall soon… I suggest Wajamaa wa kuimport vitu start exporting also… Tsunami is coming guys
Mozambique couldn’t manipulate the exchange rate forever. Markets always correct themselves. The worst is yet to come.
Since our shilling is free floating, IMF should keep their peace and let the market decide it’s value.
Bullshit, you do not print money to adjust the exchange rate, ongea vitu unaelewa.
The IMF has consequently reclassified the Kenyan shilling from “floating” to “other managed arrangement” to reflect the currency’s limited movement as a result of periodic central bank interventions. This move could lead to foreign exchange volatility as the market absorbs the effects of an overvalued currency.
The shilling has remained stable at Sh101-Sh102 against the US dollar. A volatile foreign exchange market might throw Kenya’s economy into a whirlwind.
Should this happen, importers will be the biggest losers while those paid in dollars and exporters will gain.
In addition to the many instruments at the hands of Treasury to control the value of the shilling, one apparent layman deduction of this revelation is that Treasury has been secretly ‘printing’ money.
inside their boxers?
If true then some of us will be hit hard…very hard
Funga macho jamaa… The earlier the better
you really want to advance this conspiracy, don’t you?
Tough times ahead… Jubilee imecheza PR Mpaka na Kenya shilling… Ngojeni things are not looking good soon
surely I can’t trust this jubilee looters… there might some truth in it
alarmists galore, that is not happening soon endelea tu kuota. We have been on a free fall since the goldenberg era. Let me drink my soup in peace
Hapana. The shilling has not been free floating. It has been dirty floating
And the jirongo? That’s when the rain took a stick to our asses…
:D:D Hawa watu are in deep slumber…
What does that mean, kuna mtu ametafuta dollars akanyimwa coz. that is what happens when states try to keep an artificial value of their currency
you create a rumour then you say there might be some truth in it? what kind of wanking is that?