The Central Bank of Kenya Monday hiked a key policy interest rate by 0.50 basis points, the first in seven years to contain inflation.
This is the first interest rates hike by the bank since 2015.
“The Committee noted the elevated risks to the inflation outlook due to increased global commodity prices and supply chain disruptions and concluded that there was scope for a tightening of the monetary policy in order to further anchor inflation expectations. In view of these developments, the MPC decided to raise the Central Bank Rate (CBR) from 7.00 percent to 7.50 percent,” the Monetary Policy Committee (MPC) said in a statement.
The MPC has maintained the Central Bank Rate (CBR) at 7.00 percent thirteen consecutive times, citing that the accommodative policy stance adopted in March 2020, which saw a cumulative 125 bps cut, was having the intended effects on the economy.
It further said it will closely monitor the impact of the policy measures, as well as developments in the global and domestic economy, and stands ready to take additional measures as necessary.
The Committee will meet again in July 2022 but remains ready to re-convene earlier if necessary.
Raise Policy Rate to Contain Inflation: Kenya Bankers to CBK
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