The Central Bank of Kenya releases a weekly bulletin every Friday. This bulletin is more of a digest as it contains quite a bit of information on the performance of the money market over the week. However it is important to know exactly what to look out for in the bulletin so as to save a few minutes of perusal.
Depending on which factor you represent in the economy- producers, consumers, borrowers, lenders, investors etc there are certain aspects that should be of direct importance to you.
For the average investor, the bulletin usually has a paragraph on the performance of the Nairobi Stock Exchange (NSE). In last week’s bulletin, the CBK reported that the stock market continued gaining over the week with the NSE 20 share index up by 105.21 points and the NSE All Share Index up by 2.04. These indices are both measures of stock performance and thus should be relevant to investors. It states that the stock market was bullish (optimistic) as the number of shares traded increased from 118.08 million the previous week to 159.2 million shares.
The bulletin also reports on the results of the government securities auction carried out during the week. This is important to all investors in general. It states the amount of bids received and the amount the CBK accepted. It also reports the weighted average interest rates investors expect to receive.
For a commercial bank, the bulletin reports on the trend followed by interbank rate during the week. The interbank rate is the cost at which commercial banks borrow money from one another. For the week ended 20th April 2012 the interbank rate increased by 3.87% from 11.27% the previous week to 15.1%. This means that the finance department at a commercial bank should expect the interbank rate to increase as well this week and therefore it may have to restructure its borrowing and lending plans for the week.
For the producer who imports raw materials for his production process the bulletin reports on the trend followed by the Kenya Shilling over the week. In last week’s bulletin the CBK reported that over the week the Kenya Shilling weakened against the dollar and traded at an average of KES 83.19 per US Dollar as compared to KES 83.18 the previous week. This means that a producer should expect the cost of importation to increase this week as well, he can therefore take steps necessary to mitigate against this increase.