Kenya holds Lending Rate Unchanged at 11.5% as Kenyan Shilling Stabilizes, Inflation Ease …

Nairobi, Kenya, Capital Market in Africa — The Central Bank of Kenya (CBK) kept its key Central Bank Rate (CBR) unchanged as the Kenyan shilling stabilized against the US dollar and easing pressure on inflation, according to the statement signed by Governor Patrick Njoroge.  

The Monetary Policy Committee retained the lending interest rate for a third consecutive meeting at 11.5 percent after an increase of 150 basis points each in June and July to cushion the effect of Kenya Shilling depreciation in the first half of 2015.  See the chart below for the evolution of the CBR from 2006 to-date.

The statement highlighted also that the CBK’s foreign exchange reserves stands at US$ 6,777.2 million (4.3 months of import cover) from US$ 6,115.9 million (3.9 months of import cover) at the end of September. The build-up in reserves was supported by purchases of foreign exchange from the market and proceeds of the Government’s syndicated loan. These reserves, together with the Precautionary Arrangements with the International Monetary Fund (IMF), continue to provide an adequate buffer against short-term shocks.

Kenya’s inflation rate slowed to 6.7 percent in October (an increase relatively to 6.0 percent in September) from this year’s peak of 7.1 percent recorded in April, and remains within Government’s target of 5.00 percent +/- 2.5 percent, the bank’s the statement said.  

To read MPC’s statement click MONETARY POLICY COMMITTEE MEETING Release Statement