The Monetary Policy Committee (MPC) has retained Central Bank Rate at 10.50 per cent
In making the decision, MPC noted that inflation is expected to remain within the target range, supported by lower food prices with expected improved supply. Additionally, the MPC observed that NFNF inflation was expected to decline, indicative of easing underlying inflationary pressures.
The Committee further assessed that the impact of the tightening of monetary policy in June to anchor inflationary expectations was still transmitting in the economy.
“In view of these developments, the MPC decided to retain the Central Bank Rate (CBR) at 10.50 per cent,” said Kamau Thugge, Chairman, Monetary Policy Committee.
He said the Committee will closely monitor the impact of the policy measures, as well as developments in the global and domestic economy, and stands to take further action as necessary.
The Committee met on Tuesday, against the backdrop of a continued global uncertainties, persistent inflationary pressures, increase in international oil prices, a weak global growth outlook, geopolitical tensions, and measures taken by authorities around the world in response to these developments.
The Committee noted that the CBK foreign exchange reserves, continue to provide adequate cover and a buffer against any short-term shocks in the foreign exchange market.
Goods exports increased marginally in the 12 months to August 2023, growing by 0.5 per cent compared to a similar period in 2022. Receipts from tea and manufactured exports increased by 4.5 per cent and 23.2 per cent, respectively.
The increase in tea export receipts reflects higher prices due to demand from traditional markets, while the higher manufactured exports receipts reflect strong regional demand.
Imports declined by 11.9 per cent in the 12 months to August this year compared to a growth of 16.0 per cent in a similar period in 2022, mainly reflecting lower imports of infrastructure related equipment, manufactured goods, oil, and chemicals.
Tourist arrivals improved by 34 per cent in the 8 months to August compared to a similar period last year and increased by 55 per cent in August 2023 compared with August 2022.
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