So, how should we expect domestic interest rates to behave now that the Federal Reserve has hiked interest rates in the United States?
For almost a decade, the Americans have kept interest rates at almost zero as they battled with recession. It all played to the advantage of people in the developing world.
Indeed, low interest rates in the US are why we have experienced an exponential surge in capital flows to countries like ours in recent years.
Kenya has been a big recipient of these portfolio flows, exemplified by the domination of foreign investors trading in both equities and fixed- income securities.