MPC Holds Interest Rates Steady at 7pct; Economic Outlook Positive

Monetary policy consists of decisions and actions taken by the Central Bank to ensure that the supply of money in the economy is consistent with growth and price objectives set by the government.

Patrick Njoroge Photographer: Luis Tato/Bloomberg

Kenya’s Monetary Policy Committee retained its benchmark lending rate at 7.00 per cent, an accommodative stance necessary to revive growth and come out of the Covid-19 induced stress.

This is the 11th time the MPC has retained the interest rates.

Being the last meeting of the year, it was held against a backdrop of the global COVID-19  pandemic, the continued rollout of vaccination programmes, other measures taken by authorities around the world to contain its spread and impact, and the emerging developments regarding a new COVID-19 variant.

The committee further said the country’s inflation rate is expected to remain within the government’s target range of 2.5 per cent-7.5 per cent with muted demand pressures. It added that leading economic indicators showed continued robust performance.

“The three surveys conducted for the MPC meeting—Private Sector Market Perceptions Survey, CEOs Survey, and the Survey of Hotels—revealed the highest level of optimism about economic growth prospects since March 2021,” Dr Patrick Njoroge, Chairman MPC said in an emailed statement.