There was a time the Exchange Rate was KES 7/US$ & last month it was KES 105/US$... So in less than 40 years the KES has gone to the dogs. And even they spat it out.
When KQ said it will price local/domestic flights in US$ (converted to KES at the prevailing rate) some folks huffed & puffed and called KQ all sort of names...
I said BULLSHIT to those silly arguments that KQ should charge in KES coz it is a Kenyan firm... It is out to make a profit not be patriotic.
Anyway, so comes along this little tidbit... HFCK to source loans in forex to on-lend in forex! Hah! So where are those folks who complained about KQ?
KES interest rate are 24% & climbing... So it makes sense for some who are willing to take the forex risk to borrow in US$ at much lower rates!
The over-arching theme is that Kenya is dollarizing... Ask your supplier about the following goods or services:
- Cars
- Computers
- Flights (local & international)
- Fuel (yep, its a combination of oil prices prices in US$)
- And so on and on and on...
Just dollarize... Zimbabwe did it & it has one of the lowest inflation rates in Africa...
** I hope the idea of a common EAC Currency is shelved until ALL the trade barriers are removed between EAC countries... Then merge the Fiscal Policies of all the EAC countries... Otherwise, it will fail... See the travails of the Euro!
*** A 'new' currency based on a /basket/combination of currencies would be a better idea but harder to implement. Some of the candidates for the basket would include US$, Yen, Yuan, Rupee, Euro, Sterling Pound, UAE Dhiram, Uganda Shilling & Tanzania Shilling. These are countries Kenya does substantial business with...
** I hope the idea of a common EAC Currency is shelved until ALL the trade barriers are removed between EAC countries... Then merge the Fiscal Policies of all the EAC countries... Otherwise, it will fail... See the travails of the Euro!
*** A 'new' currency based on a /basket/combination of currencies would be a better idea but harder to implement. Some of the candidates for the basket would include US$, Yen, Yuan, Rupee, Euro, Sterling Pound, UAE Dhiram, Uganda Shilling & Tanzania Shilling. These are countries Kenya does substantial business with...
2 comments:
I think Kenol took your advice..and will publish their full year reports in US$, alongside Kshs.
However it may be premature to jump after the dollar.. a few years ago, there was a move to have the Euro to become the new benchmark for .KE, replacing the US$..now??
@bankelele - Yes, I saw the announcement by KK. I think KQ will do the same based on the foreign shareholding it will have post-Rights.
BTW, the US$ as I mentioned is not ideal but it can be a start for us to move to a basket of currencies...
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