Kenya’s Central Bank has retained its benchmark lending rate at 8.5 per cent for the tenth session in a row. Kenya’s Central Bank has retained its benchmark lending rate at 8.5 per cent for the tenth session in a row. The bank’s Monetary Policy Committee (MPC) noted that the country’s overall inflation has continued to decline over the last two months and lingering within the government target.
“Overall month-on-month inflation declined from 6.09 per cent in November 2014 to 6.02 per cent in December 2014, mainly reflecting significant declines in the prices of fuel and electricity. However, these declines were partly offset by a rise in the food index during the period. This indicates that there was no significant demand driven inflationary pressure or threat to the economy,” said the Central Bank of Kenya (CBK).
Nonetheless, the committee observed that the strengthening of the US Dollar pressured the shilling. However, interventions from the CBK and resilient foreign exchange inflows through diaspora remittances and increased activity in the Nairobi bourse halted short-term volatility.
“The sustained confidence in the economy reflected in the massive oversubscription of the Sovereign Bond that was re-opened in December 2014 also supported the Kenyan Shilling,” the bank said.
The Central […]