​Kenya’s CBK Holds Interest Rates Steady, Says Economy on Track

The Central Bank of Kenya (CBK) has left the benchmark lending rate unchanged at seven per cent following its policy meeting on Tuesday.

Central Bank of Kenya Kisumu Branch I Khusoko

The Central Bank of Kenya held interest rates steady at 7.0% on Tuesday citing a healthy economy supported by robust performance of construction, manufacturing, education, real estate and transport and storage sectors.

This is the 1oth time the bank’s Monetary Policy Committee (MPC) has maintained the rate.

“The economy is expected to rebound in 2021, supported by the continued reopening of the services sectors, recovery in manufacturing, and stronger global demand,” the CBK said.

The National Treasury expects the economic growth to exceed 6% this year after contracting 0.3% last year.

The Central Bank said it had taken note of inflation pressure both locally and internationally, but that its expectations remained within the targeted medium-term range – of 2.5% to 7.5% with muted demand pressures.

“The MPC, therefore, saw the need to closely monitor developments in inflation and stands ready to respond to any second-round effects,” it said.