Thread by @MwangoCapital

Central Bank Governor speaking today.

A thread:

1. On Inflation:

https://twitter.com/CBKKenya/status/1420616629524865026

2. Factors pushing up inflation:

[@njooroge + @CBKKenya]

3. With the new taxes, the new tax measures would impact inflation by 1.78% all other factors held constant.

4. Sales turnover above 2020 and 2019 levels.

5. Credit doing well:

6. All indicators point to a strong recovery in H1 2021 - @njorogep

7. CEOs show optimism on economy recovery

8. Hotels are re-opening, restructuring of businesses expected, Nairobi hit harder than the rest of the country

9. Coffee prices increased because of supply shocks in Brazil (frost)

10. Seasonality in remittances still hold but time shifted due to factors such as changes in Kenyan academic calendar

11. Current account deficit at 5.2% and expected to hold to 5.4% by the end of the year

12. "One word to say on reserves, they remain adequate" - Dr. @njorogep alluding to ~5.7 months of import cover

H/t @Ramah_Nyang @MihrThakar @LeoKemboiEcon

13. Bills to bond ratio
2 years ago:
34: 66%

Now:
21%: 79%

Very good to government.

H/t @MakoriGeorge_

14. On liquidity management:

Jun/Jul 2021 saw influx and immediate outflow of liquidity on pending bills (counties, debt repayment e.t.c), expecting positive outcome on county level payments as contractors and firms get paid

15. Modernisation of monetary policy framework and operations - paper published.

"We need to keep up with changing circumstances" - Dr. Njoroge
centralbank.go.ke/wp-content/upl…

16. In response to a question by Faisal Ahmed (Citizen) on .ke election cycles & economic impact @njorogep says we need to be better planners and used a coconut lifecycle analogy, elections will always be there, we need to move and plan at the society level & not elections only

17. @njorogep no need for expanded mandate for @CBKKenya

18. A lot of liquidity in the system, no need to lower rates at this point in time - @njorogep

With NIFC; Nariobi International Financial Centre being setup @CBKKenya still commits to AML; Anti Money Laundering standards

21. No approval for lending rate caps by @CBKKenya , interest is to strengthen lending market, not many players have been doing risk based pricing in the market, role of central bank is supervisory

22. NPLs at 14% down from 14.2%

23. Razia Khan (Stanbic) - Credit growth is fine but election cycles pose risks...

@njorogep - election slowdown expected, about time not be driven by political cycles, market based policies need to dictate direction, elections should drive argument for accommodative policy