Kenya’s central bank held its benchmark lending rate at nine per cent on Monday, the bank’s monetary policy committee said, saying inflation was anchored within the target range. Policymakers said the decision, the third hold in a row since September, was also supported by their view that the economy was “operating close to its potential”, they said. According to Reuters, year-on-year inflation was 5.7 per cent last month, well within the government’s preferred band of 2.5-7.5 per cent.
Economic growth accelerated to six per cent in the third quarter of last year, up from 4.7 per cent a year earlier. The committee, however, warned of the potential for higher volatility in the global financial markets this year, mainly due to slowing global economic growth, Brexit and a trade war between the U.S. and China.
The Kenyan shilling was firm against the dollar on Monday due to hard currency inflows from diaspora remittances and thin oil importer demand ahead of a central bank rate meeting.