CBK lowers benchmark rate to 12pc

 

The Central Bank of Kenya (CBK)

The Central Bank of Kenya (CBK) has lowered interest rates by 75 basis points in its latest review.

The Monetary Policy Committee on Tuesday announced a cut in lending rates for the second consecutive time to 12pc from 12.75pc citing a decline in inflation.

“The MPC noted that overall inflation has declined further and is expected to remain below the midpoint of the target range in the near term, supported by stable food inflation attributed to improved supply from the ongoing harvests, a stable exchange rate, and lower fuel inflation,” said Dr Kamau Thugge, CBK Governor.

Kenya’s annual inflation rate reduced to 3.6pc last month compared to 4.4pc in August which the bank says is well below the mid-point of the target range.

According to the committee, non-food non-fuel inflation has moderated to 3.4pc in September from 3.5pc and is expected to remain stable.

The latest rate cut now sets up consumers for lower cost of borrowing after a decline in credit uptake.

“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,” added Dr Thugge.

The next committee meeting is slated for December this year.

By Ronald Owili