The Monetary Policy Committee in Kenya has lowered the Central Bank Rate to 12% from 12.50 per cent to stimulate economic growth, following a significant decline in inflation rates.
The decision provides relief to businesses and consumers struggling with high borrowing costs.
The MPC noted that overall inflation had declined further to 3.6 per cent in September 2024 from 4.4 per cent in August, remaining well below the midpoint of the target range. This decline was primarily attributed to lower food and fuel inflation, which had been supported by improved agricultural harvests, a stable exchange rate, and lower global oil prices.
“The MPC also noted the sharp deceleration in credit to the private sector, and the slowdown in growth in the second quarter of 2024, and concluded that there was scope for a further easing of the monetary policy stance to support economic activity while ensuring exchange rate stability. Therefore, the Committee decided to lower the Central Bank Rate (CBR) to 12.00 per cent,” said Dr Kamau Thugge, chairperson Monetary Policy Committee.
The MPC projected that inflation would continue to remain below the midpoint of the target range in the near term, supported by these favourable factors.
