The Central Bank of Kenya left the benchmark rate unchanged at 7% for the fifth time this year. According to the Monetary Policy Committee, the policy measures implemented since March were having the intended effect on the economy and therefore, the committee decided to retain the Central Bank Rate (CBR) at 7%.
Central Bank Governor Dr. Patrick Njoroge noted that Inflation has remained within the target range of 2.5% and 7.5% and is expected to stay within the range in the near term, “supported by lower food prices and muted demand pressures.”
Economic indicators show a recovery in Kenya’s economy in the second half of 2020. Exports have increased by 2.8% in the January to October period, compared to the same period in 2019.
Foreign exchange reserves have slightly declined and currently stand at $7,952 million, equivalent to 4.89 months of import cover. Despite the decline, CBK says that the forex reserves “continue to provide adequate cover and a buffer against short-term shocks in the foreign exchange market.”
According to the monetary policy committee, Kenyan banks have strong liquidity and adequate capital and the sector has shown resilience in this harsh economic times.
