CBK Keeps Rate for the 13th consecutive meeting

In the September 18th meeting, Kenya’s Central Bank kept its benchmark rate (CBR) at 10 percent and said that the current policy stance remains appropriate. The meeting was held against a backdrop of general macroeconomic stability, a prolonged election period, and continued uncertainties in the global economy.

The Central Bank of Kenya (CBK), which has maintained its rate for the thirteenth consecutive meeting said the decision aims to continue to anchor inflation expectations.

Excerpts from the MPC Statement;

  • Kenya’s August inflation rose to 8.0 percent from 7.5 percent in July 2017 reflecting limited supply of some food items. The bank said a normalization of supply, the expected short rains, and supportive measures taken by the Government are expected to further lower food prices in the near term.
  • The foreign exchange market has remained relatively stable supported by resilient tea and horticultural exports, diaspora remittances, and a strong recovery in tourism.
  • The banking sector remains resilient. Average commercial banks’ liquidity and capital adequacy ratios stood at 45.6 percent and 19.0 percent, respectively, in August 2017.
  • Growth of credit to the private sector recorded a slight increase to 1.6 percent over the 12 months to August 2017 from 1.4 percent in July 2017, reversing the downward trend since August 2015.