The Central Bank of Kenya (CBK) on Wednesday retained its benchmark lending rate at 7.5 percent amid rising inflation.
CBK Governor Patrick Njoroge, who chaired the Monetary Policy Committee (MPC) meeting in Nairobi, the capital of Kenya, noted that international commodity prices, particularly oil, wheat and edible oils have begun to moderate. “These developments are expected to ease domestic inflationary pressures in the near term. The MPC, therefore, decided to maintain the Central Bank Rate (CBR) at 7.5 percent,” Njoroge said in a statement.
He said that the MPC met against a backdrop of a weaker global outlook, with elevated global inflationary pressures, heightened geopolitical tensions, high commodity prices, the COVID-19 pandemic and measures taken by authorities around the world in response to these developments.
The MPC also reviewed the outcomes of its previous decisions and the measures implemented to mitigate the adverse economic impact and the financial disruptions.
Kenya raised the lending rate by 50 basis points to 7.5 percent at their last meeting in May, the first increase since July 2015. The move to raise rates was seen as the central bank’s eventual acknowledgment of the pressure caused by rising consumer prices through the first half of 2022.
The MPC noted that its action of tightening monetary policy in May was timely in anticipating emerging inflationary pressure and its impact was still transmitting through the economy.
