Kenya Holds Rates

Central Bank of Kenya left its benchmark interest rate unchanged at 8.5 percent in May. Although there were no demand driven threats to inflation, policymakers said that developments in the foreign exchange markets had triggered inflationary expectations and threatened the price stability objective.

Excerpts from the statement by the Central Bank of Kenya:

The Committee noted that despite upward pressure from food prices attributed mainly to delayed rainfall, overall inflation remained within the Government target range in March and April 2015.

The Committee concluded that there were no demand driven threats to inflation.  However, the recent developments in the global and domestic foreign exchange markets have triggered inflationary expectations and present a threat to the price stability objective of the CBK. The MPC will therefore pursue the current tightening bias stance in the money market through the CBK monetary policy operations in order to anchor inflationary expectations. Consequently, the MPC decided to retain the CBR at 8.50 percent and will continue to monitor any emergent risks from the external and domestic economies that may impact on price stability.

 Kenya Holds Rates

Central Bank of Kenya | Joana Taborda |
5/6/2015 3:26:37 PM