You mean a Currency Depreciation Could be Good? Oh Yes!

The clever people in the Kenyan financial sector - they go by names such as analysts, dealers, traders, strategists - have this embedded assumption that whenever the economy's currency is depreciating, it is a reflection of a bad omen. Not even when it is a correction.

The last time I argued that the depreciating spate that the local unit was experiencing didn't necessarily amount to a crisis, they almost hounded me out of town; until they later realised that it was an inevitable adjustment that gave way to stability at a weaker nominal level.

I would want to imagine how they take it when the Wall Street Journal is telling us that there are good news from Japan as the Yen seems to have taken the depreciation road and could walk it for a while.

Given what Japan exports - stuff such as VX V8 (you know that one?) - this will lead to a boon. And it doesn't amount to some form of manipulation similar to what some American politicians are happy to accuse China of doing.

To my analyst - or dealer, or strategist - friends, this would amount to confusion because the same Wall Street Journal was not too long ago busy telling everybody that a weaker Yen does not necessarily boost exports! Talk of confusion at the Journal!