The Central Bank of Kenya (CBK) is set to hold its next Monetary Policy Committee (MPC) meeting on November 29th, 2021. At the last policy meeting, the top decision-making organ of the CBK maintained the benchmark Central Bank Rate (CBR) at 7%.
The Monetary Authority first lowered the CBR to 7% from 7.25% in April 2020, at the height of the COVID-19 pandemic effects. MPC has retained these levels for the past 11 meetings.
With pandemic lockdown measures, taken in March 2020 lifted, including removal of travel restrictions and cessation of night curfews, it will be interesting to observe how CBK will respond.
The Kenya Shilling has also been weakening to hit an 11-month low of KSh 111.5471 to the US$ when trading at the forex market opened this Friday morning.
The Committee observed at its last meeting in September 2021 that the economy is expected to rebound in 2021, supported by the continued reopening of the services sectors, recovery in manufacturing, and stronger global demand.
Central Bank of Kenya Private Sector Market Perception Survey Findings
The MPC’s Private Sector Market Perceptions Survey, CEOs Survey, and the Survey of Hotels reveals general optimism about economic growth prospects for 2021.
Respondents attributed this optimism to continued business recovery in view of the easing of COVID-19 containment measures and increased vaccinations.
Additionally, respondents were optimistic that business prospects would strengthen in the fourth quarter of 2021 due to the anticipated increase in consumer demand associated with the festive season.
Nonetheless, respondents remained concerned about continued uncertainties over the pandemic, the impact of increased taxes on business performance and the increasingly heated political space as the 2021 polls appear on the horizon.