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Hilbroy Advisory: IMF Offers Nation New Economic Prescriptions
Hilbroy Advisory: IMF Offers Nation New Economic Prescriptions
The team also said the Central Bank of Kenya needs more powers to deal with the management of banks that flout prudential guidelines such as the amount of capital reserves or risks exposure.
Montreal,
Quebec,
Canada
(prbd.net)
27/05/2011
Montreal, Quebec, May 26th, 2011– Hilbroy Advisory Inc. (DeutcheBörse: 2H0) Hilbroy Advisory Reports: Kenya's economic growth is too fast but unsustainable and needs to be reined in, the International Monetary Fund has said. The Fund yesterday issued painful prescriptions for the economy including hiking interest rates even as it downgraded its projected GDP growth for the year to 5-5.4 per cent down from around 7 per cent.
Following a two-week visit to review Kenya's economic policies, an IMF mission team led by Domenico Fanizza called on the government to increase interest rates and reduce the budget deficit to cool down inflation and achieve sustainable growth.
The team also said the Central Bank of Kenya needs more powers to deal with the management of banks that flout prudential guidelines such as the amount of capital reserves or risks exposure.
At the same time the IMF team called on the CBK to be strengthened to handle bank crises as they arise. "The Central Bank has to have the power to act. It is a place where we place a lot of emphasis," Fanuzzi said. "We should provide CBK with sufficient powers to take action when commercial banks get in to trouble." "Prospects for 2011 remain strong with signs of continued investments in all sectors of the economy, although recent inflationary pressures and insufficient rains present downside risks that will need to be addressed in the coming months," Fanuzzi said.
He said the monetary policy stance needs to be tightened to slow down inflation which is already at 12.05 per cent saying demand for goods was putting too much pressure on supply and needed to be cooled. "Economic activity/demand is growing too fast. There is need for tightening the monetary stance to bring down inflation," Fanuzzi said.
During its last Monetary Policy Committee meeting, CBK raised its key lending rate to 6.00 per cent up from 5.75 per cent but the IMF wants it raised further.
The IMF added that by taking a pre-emptive measure such as slowing down growth marginally, the government will ensure sustainable growth in the medium term as opposed to spurts and stops.
The team said it was satisfied that both Treasury and CBK were undertaking the right policies as agreed when the Fund gave Kenya an extended credit facility of US$500million in January.
Fanuzzi cited measures such as the formulation of a comprehensive Public Finance Management Bill and the demutualization of the Nairobi Stock Exchange process.
Despite its notorious reputation for flawed economic prescriptions under the infamous structural adjustment programs in the 1980s and 90s, Fanuzzi denied that the current policy recommendations would hurt growth. "Our impression is no. Everything has been developed by the Kenyan authorities," Fanuzzi said.
About Hilbroy Advisory Inc.
Hilbroy Advisory Inc. is a Canadian based advisory and consultancy services company founded in 2000. Our Company provides publicly traded and private companies, institutions and individuals with a series of advisory services enabling these companies to fully reach their corporate objectives and potential.
Our specialists will customize a service package that includes reviewing, identifying and recommending a series of specific action and tasks that help their clients’ management decisions when seeking
• Go Public strategy,
• Debt and or equity financing
• Identify prospective investors
• Hire investor relations firm
• Cross listing decisions
• Planning road-shows and promotional campaigns.
Hilbroy Advisory has established numerous international relationships over the years with Broker Dealers, Hedge Funds, Institutional Investors, High net worth Investors as well as with investor relations firms and consultants. These relationships are made available to all Hilbroy clients and our team will manage the relationships from introduction to post financing activities.
Contact:
Jean François Amyot
HilbroyAdvisory, Inc.
1400 rue Begin
Montreal, QC H4R 1X1
info@hilbroyadvisory.com
www.hilbroyadvisory.com
Tel: 514-334-3131
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About
Hilbroy Advisory Inc. is a Canadian based advisory and consultancy services company founded in 2000. Our Company provides publicly traded and private companies, institutions and individuals with a series of advisory services enabling these companies to fully reach their corporate objectives and potential.
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