Following on the widely telegraphed rate cut by the Australian central bank overnight to a record low 2.75%, here comes a truly surprise move out of the Kenya Central Bank, and its Governor Njuguna Ndung'u whose central bank just showed the world how it's really done:
- KENYA CENTRAL BANK CUTS BENCHMARK RATE TO 8.50% FROM 9.50%
- KENYA CENTRAL BANK SAYS CONFIDENCE IN ECONOMY HAS INCREASED
As long as the confidence is there... Incidentally, the expectations, by those who have nothing better to do than forecast what the Kenya central bank will do, was for a mere 25 bps cut. We expect the credit carry traders out of Niarobi to scramble for yield in places like Greece, now that their cost of funding has dropped by over 10%. The good news for those doing the inverse trade, and looking to trade Kenyan Eurodollar futures, or the "Kenyo-dollar" as the case may be, is that there still is a long way to go before all time lows rate lows are taken out.
In the global currency war, Kenya just may have far more ammo left than most developed world "ZIRP" banks.
Finally, for those wondering, the KCB governor [9]has never worked at Goldman Sachs.
Prof. Njuguna Ndung'u
Prof. Njuguna S. Ndung'u was reappointed to serve as the Governor of the Central Bank of Kenya for a further four year term with effect from March 4, 2011. Prof Ndung'u is an Associate Professor of Economics at the University of Nairobi and holds a PhD in economics from the University of Gothenburg, Sweden, and master's and bachelor's degrees in economics from the University of Nairobi.
Prior to his appointment as Governor of the Central Bank of Kenya, Prof. Ndung'u was the Director of Training at the African Economic Research Consortium. He has lectured in advanced economic theory and econometrics at the University of Nairobi, where he earned the title of Associate Professor of Economics. He also worked as the Regional Programme Specialist for the Eastern and Southern Africa Regional Office, Nairobi, of the International Development Research Centre (IDRC), Canada; and at the Kenya Institute of Public Policy Research and Analysis (KIPPRA) as a Principal Analyst/Researcher and Head of the Macroeconomic and Economic Modelling Division.
Prof. Ndung'u has had extensive research and teaching work in various fields of economics, including macroeconomics, microeconomics, econometrics and poverty reduction. A long-time researcher and trainer with the AERC and MEFMI network, he has published in international journals as well as chapters in various books on economic policy issues, inflation, interest rate and exchange rate issues, financial management, public sector growth, external debt, financial liberalization in Anglophone Africa, structural adjustment, as well as on employment and labour market issues.

