Serikali ya Kenya yafilisika, yachapisha pesa toka CBK

Wacha kuvuruga hii mada tafadhali, sisi tunazungumzia Central Bank, hujui kazi za Central Bank unachanganya na Commercial Banks hilo ndio tatizo lako

1)Central Bank haifanyi biashara kwahiyo haitoi mikopo wala kukusanya pesa kwa lengo la kuzalisha faida

2)5% ya pesa zinatozwa na Bank kuu toka kwa Wamiliki wa Banks, maduka ya kubadilisha pesa, na mashirika mengine yenye kufanya biashara ya fedha ni dhamana ili kama bank itafilisika wateja waweze kupata fidia, pesa hiyo hurudishwa pale Bank itakapofunga shughuli zake nchini.

3)Bank jukumu lake ni kuzisimamia hizo Bank na kutoa guarantee endapo zitahitaji kukopa toka nje ya nchi, kamwe Bank kuu haitoi mikopo ya aina yoyote ile kwasababu haina pesa za kufanya biashara.

Onyesha wapi Bank kuu ilishawahi kutoa mikopo au mitaji kwa Bank za Biashara. Inaonekana hujui kabisa kazi za Central Bank.
 
Are you mentally sick?, hivi wewe una matatizo gani kichwani mwako?, wewe sio mzima wa akili kabisa. How can you dare to say Kenya has the lowest inflation rate in East Africa?, truth of the matter is, Kenya has the highest rate among Tanzania, Kenya, Rwanda and Uganda. Punguza kuropoka hovyo.
 
Asante kwa kukubali kwamba
Overdraft from Central Bank = Printing Money

Sasa nitakueleza kwanini Overdraft from Central Bank is killing Economy, because what is happening is that, the Central Banks prints Money from abroad which is not part of the Economy like what IDD Amin used to do.
 
Inflation rate August 2020
Kenya 4.4%
Tanzania 3.3%

Kenya has the lowest inflation rate in East Africa?.

Hivi kwanini unapenda kuropoka hovyo?
 
Print more money alisikika ChiefNanga/the head of state
 



Why the government has to print money​

By DOMNIC OMONDI | October 6th 2020 at 08:00:00 GMT +0300

Central Bank of Kenya Governor Patrick Njoroge. [File, Standard]
The government, like any other individual or business, occasionally runs out of money, with its bank account at the Central Bank of Kenya (CBK) reading zero.
However, it has certain statutory obligations that it must meet, whether it is broke or not. Some of them, such as debt payments and pension, are urgent and leave no room for delays.

The easiest way out is for the Treasury to request its bank to credit some money into its account as a temporary measure, allowing it to meet its obligations. This type of facility is known as an overdraft facility.
But in plain language, this is printing of money that is not supported by any economic activity.

This is what happened between September 18 and September 25, when the government took an overdraft facility of Sh15 billion that experts say was precipitated by the adverse effects of Covid-19, which has hurt the country’s tax base.

“It (overdraft facility) is supposed to function as a temporary source of cash whenever the Treasury does not meet its target debt raising,” said Ndoho Wahoro, the CEO of Euclid Capital and former director-general of public debt management at the Treasury.

Should the government issue security, a bond, for example, and most of the offers come in at higher interest rates, then a responsible CBK would advise the Treasury to take an overdraft, said Wahoro.

He added that the facility is taken to cover urgent pending bills, including emergencies, priority payments such as local loans, or emergency measures such as the Covid-19 crisis.

Around this time, the government might also have paid some syndicated or Chinese loans, according to Churchill Ogutu, a financial expert at Genghis Capital, an investment bank.

The government might have also tapped into money it expected to get from the local market by issuing short-term securities of Sh24 billion.

However, it only received offers of Sh7.1 billion and ended up accepting Sh6.6 billion from investors.

Even worse, most of the money that was accepted was rolled over, meaning it was used to repay maturing loans.

The current cash crunch was further aggravated by poor revenue performance, which was a result of reduced economic activities after the pandemic hit the country in March. As a result, CBK had to credit some money into the Treasury’s Consolidated Fund. Excess printing, however, is highly discouraged.

The law only allows the government to take an overdraft facility of up five per cent of the gross recurrent revenue as reported in its latest audited financial statements. This is put at Sh68.5 billion for the year to June 2020.

And with the government having already borrowed Sh46 billion, it still has room to add another Sh12.5 billion through the overdraft facility.

The limit
“The limit for the year ending June 30, 2020, is Sh68.5 billion, while in the previous financial year it was Sh65.7 billion based on the gross recurrent revenue for the year ended 30 June 2018, which are the latest audited financial statements at the date of approval of these financial statements,” said CBK in its financial statement for the year ending June 2020.

With an overdraft account, a bank covers the payments a customer has made that would otherwise be rejected, or in the case of cheques, would bounce.

At CBK, interest is charged at the Central Bank Rate, which is currently at seven per cent.

Printing of money went overboard in the early 1990s, a period that was also characterised by high inflation, which is the rate at which the prices of goods and services increase over a given period, typically a year. The early 1990s were difficult times for Kenya. There was an aid embargo as Western countries put pressure on Kenya to allow for multiparty elections. This left the government with a huge Budget hole.

“The escalating fiscal deficit had to be financed from money printing,” said the International Monetary Fund (IMF) in a paper that evaluated Kenya’s inflation from independence to 1996.

Besides excess money in circulation, this period was characterised by a severe shortage of foreign exchange, price decontrol following inadequate supplies of essential commodities, and increased spending in the run-up to the 1992 elections, according to the IMF.

As a result, inflation touched an all-time high of 61.54 per cent in January 1994. There was too much money chasing too few goods.

In other words, Sh1,000 in January 1994 could barely buy half of what it bought in January the previous year.

Three years later, the Central Bank converted this overdraft facility that exceeded statutory limits into a loan at an interest rate of three per cent, which is repayable by 2039.

This loan is guaranteed by a deed executed by the Cabinet Secretary of the National Treasury.

Why the government has to print money

Serekali ya Kenya yaishiwa pesa(Bankrupted)
 
 
Hadi uhuru atoke watabeba pesa kwenye magunia
 

State ‘prints’ Sh15b in one week to plug cash shortfall​

By DOMINIC OMONDI | October 5th 2020 at 12:00:00 GMT +0300

The government printed a record Sh15 billion in the seven days to September 25 as pressure mounted on Treasury to finance an expansive budget.
Data from the Central Bank of Kenya (CBK) shows that by September 25, the government had received an overdraft facility of Sh46 billion from CBK, an increase from Sh31.3 billion a week before.

It is one of the biggest overdrafts that the government has taken from the CBK in a week and came at a time when the National Treasury was under pressure to make some interest payments.
With an overdraft facility, CBK simply credits money into the government's coffers, a feature that is technically referred to as printing money.

If not done carefully such a move could result in high inflation, increase in prices of products in the economy as more money chases fewer goods and services.
Printing more money doesn’t increase economic output – it only increases the amount of cash circulating in the economy.

If more money is printed, consumers can demand more goods, but if firms have still the same amount of goods, they will respond by putting up prices.

The National Treasury, whose finances have been negatively impacted by the outbreak of the coronavirus disease, has been forced to borrow a lot of money from the domestic market to help the economy recover.

Although there have been faint voices for increased printing in the face of the Covid-19 crisis, the government has steered clear and in fact, paid all its overdraft facility by end of July.

By the end of the 2019/20 financial year, the government’s overdraft facility stood at Sh47.1 billion, an increase from Sh57.3 billion.

“Section 46(3) of the Central Bank of Kenya Act sets the limit of the government of Kenya’s overdraft facility at the Bank at five per cent of the Gross Recurrent Revenue as reported in the latest Government of Kenya audited financial statements,” said CBK in its financial report.

"The limit for the year ending June 30, 2020, is Sh68.5 billion, while in the previous financial year it was Sh65.7 billion based on the gross recurrent revenue for the year ended 30 June 2018, which are the latest audited financial statements at the date of approval of these financial statements."

Interest is charged at the Central Bank Rate, currently at seven per cent.
Printing of money went overboard in the Kanu era in the early 1990s, a period that was also characterised by high inflation.

In 1997, CBK converted the government of Kenya overdraft facility that exceeded statutory limit into a loan at three per cent interest repayable by 2039. This loan is guaranteed by a deed executed by the Cabinet Secretary of The National Treasury.

Principal repayments of Sh555 million are done every six months while interest accruing paid monthly.

With reduced tax revenues, the government has been forced to go on a borrowing spree.

When you include grants, the budget hole to be plugged with loans is expected to rise to Sh951 billion from the earlier estimate of Sh841 billion in the financial year ending 2021.

This deficit will be plugged through both local and foreign borrowing of Sh554 billion and Sh397 billion respectively.

Luckily for government, most of the loans it has so far received have been cheap with a long tenor and grace periods as well as low-interest rates.

The loans have mostly come from multilateral institutions such as the World Bank, International Monetary Fund and the African Development Bank.

The government in the year ended June 30, 2020, took Sh47 billion on its overdraft facility and another Sh21 billion loan that brought the total to Sh68.9 billion owed to CBK.

State ‘prints’ Sh15b in one week to plug cash shortfall
 

Why these economists want broke governments to just print money​

Thursday, October 01, 2020

Central Bank of Kenya Governor Patrick Njoroge displays new notes on June 3, 2019. Sila Kiplagat | Nation Media Group

By Tony Mwite

What you need to know:​

  • Modern Monetary Theory suggests that Governments reliance on taxes for revenue is rather limiting leaving the Government with only debt options.
  • In such a model taxes then start becoming a tool to regulate against inflation rather than one that is primarily the source of Governments revenue.
Governments of sovereign nations can never run out of money. Yes, this notion is based on an economic model known as Modern Monetary Theory (MMT) that is fast gaining attention worldwide.

In fact, a book on the same, titled The Deficit Myth released recently, is now on the list of New York's best sellers. MMT solutions are gaining traction because they are not only disruptive but also promise to get the global economy through the coronavirus crisis.

The theory is hinged on the philosophy that governments have a monopoly over their own currency meaning in principle, the government can never run out of money.

Central Banks can implement a Structured Money Creation System (printing or electronic) as a source of revenue. Yes, the government can make money out of thin air and inject it into its budget. Now the theory does not suggest a willy-nilly approach, no, it suggests a framework based around a structured system that has guidelines and related checks and balances.

Additionally, MMT further argues that governments' reliance on taxes for revenue is rather limiting leaving it with only debt options. Government debt is a sore spot. In Kenya, for instance, we now have about Sh3 trillion in foreign debt and another Sh3 trillion in local debt. Taxes no longer meet the speed of development. In comes Modern Monetary Theory.

In money creation, the lens the government perceives budgets changes. The question of where to find money becomes the easiest question to answer. It now becomes what can we achieve, how do we achieve it, and so forth.

As with all models, there are risks and limitations, and so does MMT. There are two key restrictions namely, inflation and availability of resources.

Inflation​

Excess money in an economy creates inflation but how much is too much? What if the Central Bank of Kenya (CBK) created Sh1 million ($10,000) every year. Will this cause hyperinflation? Maybe Sh100 million per year? Most will agree that figures under Sh100 million are inflationary averse but yet even this amount spread over 20 public and private children's homes could be a great boost.

More caregivers will be employed, more clothes will be purchased, more food will be bought, better sports and academic services will be offered. Therefore, rather than have a ceiling figure, we advise a project-by-project inflation rating.

We suggest that for each programme the government proposes, it must first undergo an inflation rating by the Central Bank of Kenya. For argument sake, say out of 10 points with 10 being extremely inflation attractive and thus a safety cap of seven points is put in place.

Proposals of projects that score seven and above are returned to be amended. This way we handle the inflation question from inception.

Availability of resources​

Rather than financial limitations, MMT helps the government focus on the real limits of resource availability (human capital, raw material, climate, technical expertise, and so on).

For example, a government can desire to construct a mega airport. No problem. The money can always be created and so the question that arises is do we have local construction manpower in numbers? Do we have enough raw materials such as steel and concrete locally? Do we have spare manpower and machinery so as not to compete with other private sector projects and so on?

The new role of taxes​

In such a model taxes then start becoming a tool to regulate inflation rather than one that is primarily the source of government revenue.

How does it regulate?

It works at the backend where in the event inflation numbers start to escalate the tax body levies higher taxes in that sub-sector which will reduce the amount of cash flow into the economy thus stemming inflation.

The tax money then is not returned back into the economy, instead, it's destroyed or donated as aid to foreign nations so as not to re-incur the rise in inflation these monies were warding off.

Kenya a donor nation, Hallelujah.

Foreign debt​

Has the Sh3 trillion foreign debt caused hyperinflation? No. Therefore, the government could simply have printed the money rather than borrow seeing that there are no significant inflationary effects caused by monies coming from outside the economic cycles.

Our proposal​

As a pilot programme we suggest the formation of a Revenue Replacement Grant Scheme as a key anti-corona stimulus programme for businesses of all levels. The grant can be processed digitally after businesses provide bank statements of their 2019 revenues.

The 2019 revenues can be approved and wired to them monthly for say two years. The scheme will be gradually phased off closer to the two-year mark and seeing it's a replacement plan we don't foresee inflation.

This means rather than retrenching, businesses can continue paying salaries and the economy will recover immediately. We need a new model for todays more pressing challenges and this is a viable candidate.

Mr Mwite is a director at Clark and Hampton Kenya and Out Of The Box Economists.
clarkandhampton@gmail.com

Why these economists want broke governments to just print money
 
Akili nying huondoa maarifa nan kakudanganya benk kuu wanachapisha pesa benk kuu inapeleka tender kwa viwanda vya kutengeneza pesa na mara nying huwa ni CONFIDENTIAL hii bra bra wanaxotoa kwenye media ni kulipima soko na kutoa attention lkn nyuma ya paxia wana agenda zao
 
Mwanaume, huwa nakuambia soma unakataa, ukiitwa mjinga unacatch feelings.

Inflation rate ya Kenya 4.2% latest ya september 2020, Ya Tanzania world bank estimate ni 4.8% kwa sababu hamtoi takwimu, ya mwisho ilitolewa June 2020, Uganda ni 4.5% hii september,Rwanda ni 6.9% hii september.

Unajua nimeona wewe ni kama napigia ng'ombe guitar.
 
kawaida unakuwanga kichwa malenge lakini hapa umechoma zaidi! wewe huwezi saidika karne hii....

1. Central Bank ya Kenya (kwa maelezo yako inaonekana kwamba tz hakuna central bank au haujui jinsi inavyo endesha shughuli) is the banker for, adviser to and fiscal agent of the Government of Kenya. Isitoshe, Central Bank hutoa mikopo kwa commercial banks na hapo hupata faida kutokana na interest.
2. Kenya kuna shirika linaloitwa Kenya Deposit Insurance Coporation ambalo lina jukumu ya kulinda pesa za wateja ikitokea kwamba bank fulani imefilisika. HOME . isitoshe, ikiwa bank imefilisika, wateja hulipwa hela zao lakini sio zote kwani ni % kidogo tu inashikiliwa na shirika hilo kwahivyo kuna njia zingine mbadala hutumika kujaribu kufidia wateja.
3.Point yako ya tatu ni uharo na inaonyesha haujui jinsi central bank huendeshwa.

** natumai uzii huu utakusaidia hapo tanzagiza! Wakenya itabidi tuanze kulipisha hii elimu tunayoleta hapa jf.
2.
 
Thank you for proving my point on modern money theory. If you read the article debt is not a problem.
 
You must log in or register to reply here.
Menu
Log in
Register
Cookies are required to use this site. You must accept them to continue using the site. Learn more…