Goldtent TA Paradise

hmmm……..President of Kenya tells citizens to get rid of US dollars……FARMER – your thoughts??

1. Farmer says:

   March 28, 2023 - 3:06 am at 3:06 am

   Wow, that came as a surprise to me. He seems to have some inside baseball. He says it will happen in a couple of weeks. There is a disaster brewing if its true. As far as Kenya is concerned, it is the primary hub of China’s Belt and Road initiative into continental Africa. You may have thought Egypt would hold that important position but its not possible. There is no road that follows the Nile River South into Sudan and Ethiopia. So the transportation corridors are running from the Port of Mombassa inland to Uganda to Tanzania, to Ethiopia and elsewhere.

   Check a belt and road map. The seaway connection from China goes directly to Nairobi through the Port of Mombassa. So when you ask me what my opinion about this is, I would say the President of Kenya is probably the most informed person on the African Continent about what is coming next with regard to China, Russia the BRICS and currency changes. His role is as pivotal as his countries geographic location.

   If you hold dollars, maybe you should dump them!

2. Farmer says:

   March 28, 2023 - 4:28 am at 4:28 am

   OK I had to check around and find out more. This story is so curious it cannot be ignored. I was able to piece together what its all about and this post should clear it up. President Ruto of Kenya was directing his comments at a group of currency Brokers within Kenya who have been charging excessive rates of exchange to the Central Bank due to an ongoing dollar shortage. The brokers have reportedly been charging as much as 10% higher than the already high rate of exchange and costing the Treasury dearly.

   There ia a Black Market rate for dollars in Africa where dollars are sometimes extremely scarce.

   The problem stems from the Corona lockdowns when tourism fell off a cliff in Kenya. It literally dropped to zero for a few months during 2020 as the world was in lockdown. Since then the tourists (and their dollars) have only slowly been trickling back and the government has found itself in an unusual position of being short of dollars to buy imported goods. This is not a normal situation in Kenya as its one of AFrica’s stronger economies and like Egypt it typically has a steady flow of dollars from tourism and the Diaspora of Kenyans living abroad.

   OK so what about the threat he made that you should get rid of dollars?

   Well that is not actually a story about dollars. The Kenyan Central Bank is reinstating an exchange process that has been inactive for many years. It is called the Foreign Interbank Exchange Market. The process once set up will allow Kenya to start buying commodities abroad using Shillings instead of dollars. They have already struck a deal with the UAE to import crude oil on some kind of credit facility. But the idea is to bring sanity back to domestic foreign exchange markets and reduce reliance on dollars. Thus, Kenyan Shillings will start to strengthen versus USD once its activated in a few weeks.

   So President Ruto’s remarks were actually a swipe at the Brokers. A warning to them. Its what I would call African tough talk. They do that a lot here. He is letting those brokers know their days are numbered because the Central Bank is going to go around them. And because of that the dollar holdings they have are going to fall in value relative to Kenya Shillings.

   The story has nothing to do with a possible public repudiation of US Dollars. Its not Operation Sandman.
   https://www.the-star.co.ke/news/2023-03-22-how-well-fix-dollar-shortage-in-weeks-president-ruto/

   • Fullgoldcrown says:

     March 28, 2023 - 9:37 am at 9:37 am

     Great Journalistic Rperting Sir Farmer

     Our very own African Correspondent

     Fascinating

     • Farmer says:

       March 28, 2023 - 9:38 am at 9:38 am

       LOL…thanks Fully. That was fun.