Milbank LLP’s Post

The KES has in the first quarter of 2024 slid further and lost against the dollar with the KES now exchanging at an all time high of KES 160 to the USD. The CBK's MPC raised interest rates and from a policy perspective, this is one of the ways that Central Banks intervene to stabilize currencies. The US Fed Reserve in 2022 and 2023 raised base lending rates a record 11 times in attempt to stabalize the Green Buck. Locally, there have been various attempts to stabilize the shilling including the G2G deal which was aimed at ensuring there are enough FX reserves by delaying payments to oil suppliers. Recent reports indicate that it may not have achieved intended objectives perhaps an indicator of an underlying issue with the FX market in Kenya or other factors affecting and contributing to inflation. Typically, the appropriate policy response to depreciation pressures requires a focus on the drivers of the exchange rate change and on signs of market disruptions. Specifically, foreign exchange intervention should not substitute for warranted adjustment to macroeconomic policies. There is a role for intervening on a temporary basis when currency movements substantially raise financial stability risks and/or significantly disrupt the central bank’s ability to maintain price stability. Understanding the issue is key and the regulator and Gov't need to clearly identify what factors are currently leading to FX low reserves and adopt policies that alleviate the FX shocks. Some jurisdictions have suggested drastic measures such as establishment of separate funds for Gov't imports such as oil to be used for only settling FX needs for imports, reducing export retention quotas and net open positions, incentivizing FDI's and reducing cost of doing business. Needless to say Kenyans are watching keenly on what policy measures, the regulator and Gov't are looking to adopt but the bottom-line for everyone is clear that the inflation needs to be curtailed to stabilize the currency. #inflation #forex #centralbank

🇬🇧 UK Export Finance aims to secure over £12b for UK exporters in five-year plan 💷 British enterprises are poised to gain from billions of pounds in new export opportunities, boosting the UK economy, as detailed in the latest strategy from UK Export Finance (UKEF) released today. 🗣️ Tim Reid, CEO of UK Export Finance, said, “Our new plan recognises the strength of the UKEF offer, whether in supporting the low-carbon transition or using our deep sectoral understanding, global relationships and the opportunities created by new free trade agreements to get more UK businesses involved in large international projects.“ 📖 Read the news by following the link in the comments section below ⬇️ #exportfinance #internationaltrade #UK

CARM is going to drastically change how you import into Canada, and it goes into effect on October 21st. Take these steps if you haven't already. To understand the implications better, go here: https://bit.ly/3XxPQuD

CARM is going to drastically change how you import into Canada, and it goes into effect on October 21st. Take these steps if you haven't already. To understand the implications better, go here: https://bit.ly/3XxPQuD

CARM is going to drastically change how you import into Canada, and it goes into effect on October 21st. Take these steps if you haven't already. To understand the implications better, go here: https://bit.ly/3XxPQuD

CARM is going to drastically change how you import into Canada, and it goes into effect on October 21st. Take these steps if you haven't already. To understand the implications better, go here: https://bit.ly/3XxPQuD

CARM is going to drastically change how you import into Canada, and it goes into effect on October 21st. Take these steps if you haven't already. To understand the implications better, go here: https://bit.ly/3XxPQuD

CARM is going to drastically change how you import into Canada, and it goes into effect on October 21st. Take these steps if you haven't already. To understand the implications better, go here: https://bit.ly/3XxPQuD

CARM is going to drastically change how you import into Canada, and it goes into effect on October 21st. Take these steps if you haven't already. To understand the implications better, go here: https://bit.ly/3XxPQuD

CARM is going to drastically change how you import into Canada, and it goes into effect on October 21st. Take these steps if you haven't already. To understand the implications better, go here: https://bit.ly/3XxPQuD