Central Bank of Kenya’s Monetary Policy Committee (MPC), top policy organ has lowered the Central Bank Rate (CBR) from 8.50 to 8.25. The last time it lowered this key rate was in November from 9.0 to 8.50 where it has been for the past two months.
“The committee assessed that the effects of lowering CBR in November 2019 has continued to be transmitted in the economy. But there is room for further accommodative monetary policy to support economic activity. The MPC will continue to closely monitor the effects of this policy stance,” said Dr Patrick Njoroge, Chairman of MPC and Governor of Central Bank of Kenya (CBK).
MPC met on 27th January 2020 to review the outcome of its previous policy decision and recent economic developments.
“The banking sector remains stable and resilient. There were decreases in non-performing loans to gross loans which declined to 12.0 per cent in December from 12.3 per cent in October 2019. Private sector credit grew by 7.1 per cent in the 12 months to December 2019,” said MPC.
MPC observes that private sector credit, particularly for small and medium-sized enterprises, is expected to gradually due to the deployment of innovative credit products and repeal of interest rates caps and the continued easing of credit risk.
The Committee projects stronger economic growth in 2020 although it warns that the locust invasion reported in parts of the country could lead to crop losses and upward pressure on food prices.