Kenya’s Central bank held its benchmark lending rate at 11.50% on Monday for the sixth Time in a row since 7th July 2015 saying that the Current monetary policy now in place had helped moderate inflation expectations. However, CBK said it will continue to monitor developments and will use the instruments at its disposal to maintain overall price and financial sector stability.
The Bank noted that;
- Kenya’s overall inflation fell to 6.8% in February 2016, from 7.8 % in January, thereby returning to within the Government’s target range of 2.5 to 7.5%.
- Kenya’s foreign exchange market is stable even as the global markets were volatile due to pressures from China’s financial markets, and uncertainties in the advanced economies. Stability in the Country’s foreign exchange market were supported by a narrowing CAD with improved exports, strong Diaspora Remittances up by 19.9% to a record 13.8 Billion and a lower oil import bill.
- The CBK continues to urge the commercial banks to reduce their operating costs and enhance transparency in the pricing of credit.
- The Bank noted that the Country’s new IMF Precautionary Credit Facility amounting to USD 1.5 Billion covering 2 years, reflects confidence in the country’s macroeconomic policies and provides additional buffers against short-term shocks.
- Though the banking sector remains stable and resilient. The regulator continues to closely monitor the sector, particularly concerning credit risk as reflected in an increase in non-performing loans.
