The Central Bank of Kenya announced a 400 point interest rate rise to 11% in order to combat high inflation and stabilize the local currency, the Kenya Shilling, which has rapidly lost value against the dollar over the past couple of months (see previous post). Bad news for those with loans and mortgages, however local commercial banks and money markets have been reportedly impressed by this show of affirmative action from the often dithering regulatory organisation.
At the same time, the UK's Bank of England announced a second massive round of quantitive easing - QE2 (the first was in 2009), in order to counter the effects of global economic slowdown. Bad news for UK savers and pensioners. The question being asked is; will this work?