In line with the market expectations, Central Bank of Kenya on Monday retained its benchmark interest rate at 10.5% at its July 2016 meeting, saying that overall inflation was expected to remain within the Government target range in the short term. The Monetary Policy Committee also reviewed the Kenya Banks’ Reference Rate (KBRR) to 8.90% from 9.87%, effective from July 25, 2016.
READ; OPINION; CBK unlikely to cut CBR ahead of 2017 polls
The inflation has been slowing since the beginning of the year and reached a nearly 3-year low of 5.27 percent in April of 2016. The CBK Governor will on Tuesday address the media to give further highlights in regards to the current state of the economy and the MPC.
Event; CBK Governor Press Briefing – Tue 26th July 2016
Excerpts from the statement by the Central Bank of Kenya:
- Month-on-month overall inflation had increased to 5.8 percent in June 2016, from 5.0 percent in May, but remained within the Government target range, an indication that there were no significant demand pressures in the economy.
- The foreign exchange market had remained stable, reflecting a narrower current account deficit due to a lower import bill, improved tea and horticulture exports, and stronger diaspora remittances. Stability was supported by CBK’s closer monitoring of the market before and after Brexit.
- The performance of the economy remains strong, posting a growth of 5.9 percent in the first quarter of 2016, compared with 5.0 percent in a similar period of 2015.
