President Obama is to nominate 67 years old Ms Janet Yellen as the next US FED Chairperson on 9th October 2013 to replace Ben Bernanke whose term ends in January 2014. Yellen comes as the first lady to ever hold that position in the history of America. But just who is she and what makes her qualify for the executive job from where she will be literary controlling the global economy?
Janet Louise Yellen (born August 13, 1946) is an American economist and professor who is the Vice Chair of the Board of Governors of the Federal Reserve System.
Previously, she was President and Chief Executive Officer of the Federal Reserve Bank of San Francisco, Chair of the White House Council of Economic Advisers under President Bill Clinton, and Professor Emerita at the University of California, Berkeley’s Haas School of Business.
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During the second quarter of 2013, Kenya’s economy is estimated to have expanded by 4.3 per cent which was slightly slower than the growth of 4.4 per cent experienced during the same quarter of 2012. The growth was mainly supported by strong expansions of activities of Electricity and Water, Financial intermediation, Agriculture and Forestry and Manufacturing. On the other hand, Hotels and Restaurants recorded a significant contraction while Wholesale and Retail trade’s growth slowed albeit marginally.
Compared to the first quarter of 2013, the economy expanded by 0.7 per cent during the second quarter as measured by seasonally adjusted Gross Domestic Product.
The second quarter of 2013 was characterized by low inflation rate, which averaged at 4.37 per cent compared to an average of 11.78per cent that prevailed during the second Quarter of 2012. The ease in the inflationary pressure was mainly on account of lower food and fuel prices as well as a stronger shilling. The Kenya shilling strengthened against all its major trading currencies except the euro during the review period compared to the same period of 2012. The most notable gains being against the Japanese Yen and the South African Rand. A 100 Japanese Yen exchanged at an average of KSh 85.65 during the review quarter compared to KSh 100.73 in the second quarter of 2012.
International oil prices declined during the quarter under review compared to the first quarter of 2013 but nevertheless remained relatively higher than the levels reached during the second quarter of 2012. Interest rates dropped significantly during the second quarter of 2013 compared to the same quarter of 2012. Inter-bank rates recorded the most drastic drop from 16.84 during the second quarter of 2012 to 7.41 in the quarter under review. Average Yield Rates 91 –day Treasury Bills averaged at 8.68 during the review quarter down from 12.43 recorded in the second quarter of 2012.
Activities of the capital markets were more vibrant during the quarter under review compared to the same quarter of 2012. The NSE registered an upsurge of 47.2 per cent in the number of shares traded to 114,173 transactions from77,543 transactions recorded in the second quarter of 2012
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Inflation rates went up in September 2013 by 1.62 points to stand at 8.29% from 6.67% in August 2013. CPI also went up by 1.80% from 140.29 in August 2013 to 142.82 in September 2013.
Between August and September 2013, Food and Non Alcoholic drinks’ Index increased by 2.87 per cent. The implementation of the VAT Act and seasonal factors affecting supply of common food crops were the main causes of rise in the food index. In aggregate, rises outweighed falls in the average prices of various food items.
The recreation and culture index went up by 6.62 per cent over the same period, mainly due to increases in the costs of newspapers, books and magazines among other items. Similarly, on account of notable rises in the prices of cooking gas, kerosene and other cooking fuels, the Housing, Water, Electricity, Gas and Other Fuels’ index, rose by 0.87per cent.
Likewise, over the same review period, the Transport Index increased by 0.77per cent mainly due to increases in the public transport fares that were attributed to higher prices of petrol and diesel.
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The economics behind the exchange rate changes and its relationship to the current account deficit is one that can be mind-bogging if not well presented. It only takes an expert to break it down in a simple language that any person who understands English should be able to understand it.
CBK has made the effort of explaining it in the best words that I could have explained the same in and in the simplest form. Remember, at CBK is where we find the experts in these matters; and an expert view is always the best.
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Courtesy of CBK.